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Nigeria yields lower on surge in FPI inflows O BALA AUGIE

ne year spot rate for all tenor has declined to 12.85 percent, the lowest since August 2018, as sustained oversubscription of Nigerian money market persists on the back of a sudden flow of foreign portfolio investment immediately following the presidential election.

Analysts say the oversubscription of the Nigerian money market instrument is happening on the back of healthy foreign exchange inflow via the Importers & Exporters (I and E) Window. BusinessDay learnt that foreign currency inflow especially into I&E window increased by 93.7 percent to $3.1 billion in the months 0f January and February, from US$1.6bn in the fourth quarter of 2018, and the trend

appears to have continued. According to data of flows tracked by analysts at FMDQ, a total of $4.28 billion was traded on the I&E window for the week-ended March 1, 2019, an increase of $2.34 billion (120.62 percent) when compared to the $1.94 billion reported in the previous week. This has been attributed to the relatively peaceful conclusion of the Continues on page 34

Market I&E FX Window CBN Official Rate Currency Futures

($/N)

FGN BONDS

TREASURY BILLS

Spot ($/N)

360.61 306.95

0.17 12.01

0.01 13.90

0.00

10 Y -0.01

20 Y 0.04

14.47

14.23

14.13

NGUS MAY 29 2019 362.05

NGUS AUG 21 2019 362.50

NGUS FEB 26 2020 363.40

ANALYSIS

Estimated billing: How a weak regulator normalised corruption …Legal action looks most attractive option for disgruntled customers ISAAC ANYAOGU

he 2007 Meter Reading, Cash Collections and Credit Management regulation enacted by the Nigerian Continues on page 34

Inside Leading Rivers’ citizens seek judicial probe of P. 34 election killings NDIC: Sanitising the banking stable to protect P. 35 depositors

Jim Ovia (m), chairman, Zenith Bank plc, flanked from left Adaora Umeoji, deputy managing director; Peter Amangbo, managing director/CEO; Micheal Otu, company secretary, and Ebenezer Onyeagwu, deputy managing director, at the bank’s 28th annual general meeting in Lagos, yesterday.

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Wemy comeback underscores opportunity in N280bn diapers market ... As CBN, BoI provide financing ... P&G struggles, Kimberly Clark exits Nigeria BALA AUGIE

he return of Wemy Industries Limited to the Nigerian diapers market, after three and a half years of near shutdown, underlines the opportunity in a market BusinessDay estimates at N280 billion per annum. “We are back to the diapers market,” Paul Odunaiya, managing director, Wemy Industries, told BusinessDay in an interview on Friday. “We are bringing in adult diaper machines. We are going to be pioneer adult diaper manufacturer in Nigeria and we will service the Nigerian market and that of the whole West Africa by exporting what we produce here to the ECOWAS region,” he said. Wemy got funding from the Bank of Industry (BOI), and another intervention from the Central Bank of Nigeria (CBN), to enable the resuscitation of its factory, Odunaiya said. Wemy Industries, founded in 1978, is a manufacturer of adult, feminine and baby diapers, sold under Dr Brown’s and Nightingale brand names. The company was hard hit by the recession of 2016, as it was heavily exposed to foreign exchange risks, being an importer of raw materials and finished products. But opportunities exist in the industry as 7 million children are born each year, according to the United Nations International Children’s Emergency Fund (UNICEF). Data from the National Population Commission in 2015 said there were 32 million under-five children in Nigeria. If we assume an estimated diaper penetration rate of about 10 percent or 3.2 million children, using an average of four diapers a day at a cost of N60 per diaper, it gives an annual market roughly estimated at N280 billion. This excludes the adult segment and export market. There are more babies born

in Nigeria in a year than in all of Western Europe, a signal of the opportunity in the sector. “Globally, over half of the world’s births are estimated to take place in just eight countries, including Nigeria,” Pernille Ironside, UNICEF’s Nigeria acting representative, said on December 31, 2018, adding that 25,685 children would be born on January 1, 2019. The diaper industry was once dominated by Procter&Gamble’s Pampers, manufactured in its Ibadan and Agbara plants. P&G shut down its $300 million Agbara plant in July 2018 and insiders told BusinessDay that the company is now importing diapers. Until July 2018, it had been the biggest US non-oil investment in Nigeria. Sources close to the company told BusinessDay that the company faced multiple taxation and harsh treatment in the hands of Nigeria Customs Service, which regularly acts as a revenue earner rather than a business facilitator. P&G also faced multiplicity of taxes in Agbara where government agencies, who could not even build good roads, demanded huge taxes and levies. “They did not meet their projections due to increased competition and overhead costs,” a source close to the company said. “You now have the Customs and other agencies. The company was also exposed to FX risks,” the source added. Industry sources say today’s industry leader is the Agbara, Ogun State-based Hayat Kimya, which makes Molifix, preferred by a number of mothers. The Lagos-based Kimberly Clark is also a key player, producing Huggies, which is also a major brand. But insiders told BusinessDay that the company is leaving Nigeria. “Yes, the company said it would leave Nigeria and return in 18 to 24 months,” a source, who was once a staff member of the company, told BusinessDay.

•Continues online at www.businessday.ng

R-L: Emanuel Nnorom, chairman, Transcorp Hotels plc; Owen Omogiafo, managing director/CEO, and Okaima Ohizua, executive director, during the 5th Annual General Meeting of the company, held at Transcorp Hilton Hotels, Abuja.

CBN reviews MFBs’ capital requirements, approves compliance by instalment ... Categorises unit MFB into tier-1, 2 HOPE MOSES-ASHIKE

he Central Bank of Nigeria (CBN) on Monday reviewed the minimum capital requirements for microfinance banks, allowing for instalment payment and categorisation of Unit Microfinance Bank into tier-1 and tier-2. Consequently, tier-1 MFBs are to pay N200 million as minimum capital requirement, while tier-2 MFBs are expected to pay N50 million. In a circular signed by Kevin Amugo, its director, financial policy and regulation department, the CBN explained that tier-1 Unit Microfinance Banks will operate in the urban and high-density banked areas of the society, while tier-2 Unit Microfinance Banks will operate only in the rural, unbanked or underbanked areas. To aid the process of recapitalisation, the CBN directed that all tier-1 unit microfinance banks should meet a N100 million capital threshold by April 2020 and N200 million by April 2021, and tier-2 unit microfinance banks should meet a N35 million capital threshold by April 2020 and N50 million by April 2021.

Similarly, state microfinance banks are to increase their capital to N500 million by April 2020 and N1 billion by April 2021, while a national microfinance bank should hold a capital of 3.5 billion by April 2020 and N 5billion by April 2021. This move is in response to the agitation of operators over the earlier increase in capital requirements by the CBN. “The new circular addresses two out of four requests we made on minimum capital, which is creating rural MFBs with N50m capital and extending the time,” said Rogers Nwoke, president, National Association of Microfinance Banks (NAMB), in reaction to the CBN’s new directive. “We appreciate the CBN for listening to us, but as we said before, what is needed is a holistic review of the microfinance policy framework and operational guidelines. Review of capital does not address the issues and challenges of microfinance in Nigeria,” Nwoke said. Godwin Ehigiamusoe, managing director/CEO, LAPO Microfinance Bank Limited, said the review was a reflection of the CBN’s responsiveness to concerns of actors in the sub-sector. He com-

mended the NAMB leadership for engaging with the regulator in this regard. The CBN bank had in October 2018 increased the minimum capital requirement of unit microfinance banks from N20 million to N200 million, state MFBs from N100 million to N1 billion, and national MFB from N2 billion to N5 billion. Microfinance operators had protested the increases and had written to the CBN for extension of date and review. The National Association of Microfinance Banks had earlier disclosed its plans to float a National MFB licence with N10 billion capital base ahead of the full implementation of the capital requirement. The CBN and the Bankers Committee plan to establish a National MFB across the country using the facility of NIPOST, which is set for launch at the end of the month. In the National MFB establishment plan, the CBN and the Bankers Committee will utilise the sum of N5 billion as equity from N60 billion Agri-Business Small and Medium Enterprises Investment Scheme (AGSMEIS) Fund, while NIPOST will contribute its offices in the 774 local government areas.

Trade volume across FX windows declines in March as market stabilises ... as I&E recorded $1.61bn less ENDURANCE OKAFOR

olume of trade reported on the three foreign exchange windows in Nigeria fell by an average of 33.64 percent for the week ended March 8, 2019. According to the figures by FMDQ OTC, the total value of trades recorded in the Investors’ & Exporters’ (I&E) for the review week closed at $2.67 billion, representing a decrease of 37.62 percent ($1.61 billion) compared to the $4.28 billion reported in the week ending March 1, 2019. Trading activities on the Spot FX market between the Dealing Member Banks (DMBs) and their clients

stood at $2,760.93 million (average daily turnover of $552.19 million), representing a decrease of 31.91 percent when compared to the $4,054.78 million (average daily turnover of $810.96 million) recorded the week ended March 1, 2019. The review of trading activities in the Spot FX market amongst banks, as analysed from FMDQ figures, was not different as it was down by 31.41 percent. A total turnover of $395.20 million (average daily turnover of $79.04 million) was recorded, against $576.14 million (average daily turnover of $115.23 million) reported the week ended March 1, 2019. Responding on the FX market

performance, an exchange analyst said it must have been market going back to its normal level. “The values reported before were as a result of the after- election effect but the market is stabilising now and the reality is what we see in the trading activities,” said a Lagos-based commodity exchange analyst who does not want to be identified. The first analyst opinion was supported by a source at the Security and Exchange Commission, who said, “Nothing significant happened, it is just market returning back to its normal level.” “More money came into the market the week before and the report for

the week ended March 15 will help to better tell if there is major outflow,” said the analyst who spoke to BusinessDay on the condition of anonymity. Gbolahan Ologunro, research analyst at CSL Stockbrokers, told BusinessDay that immediately after the election there was a surge on the inflow into the country. “And there was a rally in the fixed-income market but yields are at the level where investors are comfortable and are not increasing their investment due to higher yields from other markets,” Ologunro said. A further analysis of the FMDQ data revealed that the year-to-date (YTD) value of trades on I&E window stood at $15.63 billion as at March 8, 2019. The I&E window was created in

April 2017 by the Central Bank of Nigeria (CBN) to boost liquidity in the FX market and ensure timely execution and settlement for eligible transactions as stipulated by the apex bank. The report by FMDQ also revealed that the CBN in its periodic supply of United States (US) dollars in the FX market, aimed at stabilising the naira, intervened in the market with $100.00 million to the Secondary Market Intervention Sales (SMIS) Wholesale window on March 12, 2019. The apex bank also sold $55.00 million each to both the Small and Medium-scale Enterprises (SMEs) and the Retail.

•Continues online at www.businessday.ng

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Nigeria decides 2019: Void votes & inconclusive state polls – something is not right

Rafiq Raji

urnout was abysmally low in the 9th March governorship elections. Militarisation of the process and voter disillusionment on the back of the 23rd February presidential election have been blamed. That is apart from the typical disinterest associated with state elections owing to the overbearing influence of so-called political godfathers on the process. It is somewhat bizarre how the states in which governorship elections were declared inconclusive, namely Kano, Sokoto, Adamawa, Bauchi, Benue, and Plateau, either had the main opposition People’s Democratic Party (PDP) candidate in the lead, or the PDP candidate had a fighting chance at winning, or the states were strongholds of the PDP. And almost consistently, the gubernatorial candidates who expressed satisfaction with now upcoming reruns, were mostly from the All Progressives Congress (APC) party, while those who were displeased were mostly from the PDP. In Adamawa, the PDP’s Ahmadu Fintiri, got 367,471 votes, while the APC’s Jibrila Bindow, the incumbent, got 334,995 votes. As the margin of 32,476 votes was less than cancelled votes of 40,988, the Adamawa election was declared inconclusive. In Bauchi, the APC’s Mohammed Abubakar, the incumbent, garnered

465,453 votes, while the PDP’s Bala Mohammed got 469,512 votes. The poll was also declared inconclusive, as the 4,059 votes margin is lower than the number of cancelled votes. In Sokoto, the PDP’s Aminu Tambuwal, the incumbent, got 489,558 votes, while the APC’s Ahmed Aliyu got 486,145 votes. With the margin of 3,413 votes between the pair less than cancelled votes of 75,403 votes, the Sokoto poll was also declared inconclusive. In Benue, incumbent Samuel Ortom of the PDP secured 410,576 votes, while the APC’s Emmanuel Jime got 329,022 votes. Similarly, as the margin of 81,554 votes between the pair was lower than the 121,019 cancelled votes, the poll was declared inconclusive. In Plateau, incumbent Simon Lalong of the APC got 583,255 votes against 538,326 votes for the PDP’s Jeremiah Useni. With cancelled votes of 49,377 more than the margin between the two of 44,929 votes, the poll was also declared inconclusive. While the final collation at the state headquarters of the Independent National Electoral Commission (INEC) in each of the states followed the Commission’s guidelines in ruling as such, it is also noteworthy that the key variable in coming to these decisions is the number of cancelled votes; which is rules-based but discretionary, and typically done at the respective collation centres. And since the basis for cancellations is well-known, political actors could quite easily engineer events to make them happen. Of course, a rebuttal by those who favour the ‘inconclusive’ decisions is that if the aggrieved parties were really that popular, they would have unassailable leads that void votes would hardly be able to change. As re-runs tend to favour incumbents, however, those who argue that some state interference was involved can hardly be blamed as well.

So while the opposition PDP has made a determination to protest the bizarre trend, it might be more important for it to put in greater resources and efforts towards winning the soonto-be scheduled re-runs, which must take place within the statutory 21 days from 9th of March. In any case, if it has evidence of wrongdoing, the courts are also at the disposal of its candidates. What is abundantly clear is that the quality of the 2019 elections would have been greatly enhanced had the amended electoral law been assented to by President Muhammadu Buhari. Now that he has won re-election, Mr Buhari should do the great service of, firstly, signing, before the end of the current legislative term, the amended electoral bill that was forwarded to him ahead of the 2019 polls. Secondly, the insights garnered from the likely numerous election petition tribunals across the country should be incorporated into a second amendment to the signed amended electoral law, which should be assented to by the president during the upcoming legislative term but before the end of 2019. In other words, political stakeholders should not now wait again until the 2023 elections are about, before making amendments to what is clearly a flawed electoral process. The service required of the PDP is to go to the tribunal for all the elections it considers to be below par, with the primary intent of ensuring that the process becomes fairer; and thus only seeing potential wins of mandates for its aggrieved candidates as additional gains. Jagaban redeems himself in Lagos In Lagos, the ruling APC pulled its weight this second time around, with its gubernatorial candidate Babajide Sanwo-Olu getting 739,445 votes, beating the main opposition PDP candidate Jimi Agbaje, who garnered

‘

...while the opposition PDP has made a determination to protest the bizarre trend, it might be more important for it to put in greater resources and efforts towards winning the soon-to-be scheduled reruns

206,141 votes. In the presidential election, the APC secured 580,825 votes in Lagos, while the PDP got 448,015 votes. Clearly, the APC upped its game in the second vote. More importantly, Mr Agbaje was quick to congratulate Mr Sanwo-Olu for his victory; a good end to a good fight. Also note how the sum of votes for the APC and PDP in Lagos for the two elections was virtually the same. In the presidential election, both parties’ sum of votes was 1,028,840, while in the governorship, it was 945,586; about 1 million in each case. So clearly, some of the votes that went to the PDP in the presidential election moved to the APC in the governorship poll. APC’s poor showing in the presidential poll in Lagos was clearly a wake-up call for the leaders of the party; who were perhaps getting a little complacent. A video recording of one of the post-mortem meetings of the party after the poll which I watched, showed party leader Bola Tinubu (‘Jagaban’) calling out the leaders of each of the key sections of the state, publicly applauding those who came through for the party in their areas of responsibility and deriding those who did not. Thus, you did not have to be clairvoyant to know it was almost a do-ordie affair for the laggards in the Lagos APC to prove their worth. Thankfully, they did so in a non-violent manner. Because unlike the many reports of wanton violence across the country, there was relatively no violence in Lagos.

Note: the rest of this article continues in the online edition of Business Day @https://businessday.ng “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Company audits: A time to shift the locus of blame

Francis Iyoha

he value of accounting lies in the information it conveys, which as a matter of course, should be credible but which as a matter of fact has suffered severe convulsions in history. The situation has attracted critical commentaries even from people who have nothing to do with the destiny of the accounting profession. That auditors are engaged to add credibility to the information conveyed in the financial statements of organizations is in the right direction but the outcomes of a great number of the audit engagements have been one of notoriety. In its role, the auditor stands between the financial statement preparer and the users and should as a matter, of course, have regard to the interest of both parties. However, the interest of the clients whom the auditors have greater contact with and whose interest they pursue vigorously because of the need to achieve goodwill and consequently retain the engagements, trump those of the users. This has afforded companies the opportunities to elevate issues of profits and dividends over matters of good corporate governance.

If we seek evidence as to why things are the way they are, it would be that the interest in consultancy services which provide superior income to auditors is impairing the quality of audits; and also that the choice of auditors has ceased to be a function of competence but now of emotions and other non-edifying considerations. Under the circumstance, the appropriate action would have been to bar audit firms from providing certain consultancy services to audit clients. This had actually been canvassed and endorsed in many jurisdictions, but who bells the cat of enforcement has been the knotty issue. The big four audit firms, for instance, have been found irresponsible at one time or the other in the context of their audit engagements and they have had to ‘cough’ out billions of dollars to salvage their reputations, yet it is no twilight for ignoble audit engagements. One would have expected the big audit firms, to take heed to always be responsible in the discharge of their assignments. The public expects no less than that the auditors do more to detect fraud which of course they did not take part in committing. This is not the primary mandate of auditors even though they should be diligent enough to uncover frauds if any. It is by law required that companies that are listed must be audited and paid by the companies whose financial statements they review. The question is, why put the auditors to so much task when most of the ‘virused’ financial statements are the products of the wisdom or lack of it of Chartered Accountants in Business (CAsB), Audit Committees and the Board of Directors? The trio ought to construct financial statements, and in fact, all financial information

fairly, honestly and in compliance with relevant standards and regulations. As a matter of professional calling, CAsB should not manipulate information at their discretion or at the instruction of superior authority. It is not that the CAsB should be in disobedience of instructions of superiors but that such instructions should not violate the professional code of conduct and other legitimate regulations in force. Whenever there is any conflict between what CAsB are expected to do and instructions from superiors, they should follow the ethical and legitimate objectives of the employer. If CAsB faces threats that cannot be eliminated in the ordinary course of communications and relationships, the option of resignation may be called to action. But how many CAsB who find themselves in serious conflicts with their employers over ethical issues whether involving financial statement or not, have chosen to resign honourably? Many, perhaps, would prefer to be neck deep with their employers in financial atrocities only to call on the auditors to play the role of ‘witch doctors’ to unravel the mystery behind the scene. When they are not able, pounds of flesh are demanded and an ocean of ‘financial’ blood spilled in ‘out of court’ settlements. Many persons in the accounting profession are embarrassed to admit the truth to themselves that the underlying headache of the auditors and their firms are the CAsB, Audit Committees and board of directors, many of whom have taken the oath of financial murderers. I believe the CAsB have enough safeguards to ensure that financial statements emanating from their organization have sufficient merit so as to reduce the burden

on the auditors in the interest of all and especially those who have an operational interest in financial reporting and other accounting information. For instance, ‘NOCLAR’ (Non-Compliance with the Laws and Regulations)provides a soft landing for the CAsB in matters of unethical practices they observe. NOCLAR requires accountants and auditors at all levels to report any act of noncompliance with laws and regulations by their employers or clients, to relevant authorities via whistle-blowing. Noncompliance, in the context of the Code, comprises acts of “omission or commission, intentional or unintentional, committed by a client or by those charged with governance, by management or by other individuals working for or under the direction of a client which are contrary to the prevailing laws or regulations.” This is a good start but who starts it! If it is fiendish to reform audit practice, let’s reform the trio of CAsB, Audit Committees, and the Board of Directors who in the context of our discussion ‘jointly’ construct financial statements which auditors are called upon to lend credibility to. Auditors would have less trouble if everyone in the financial information production chain is diligent in the discharge of legal and imperative duties. Unless and until this is done, it is not twilight for poor audit quality engagements. The only way to hasten it is to let the locus of blame arising from audit ‘disengagements’ shift from the auditors to the doorstep of the CAsB, Audit Committees and the Board of Directors. Prof Iyoha is of the Department of Accounting, Covenant University Email: iyoha.francis@covenantuniversity.edu.ng

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The AfDB and the future of African think tanks Tunji Olaopa

f all the institutions that the African continent and its energetic leadership have established to facilitate its reform efforts to achieve continental transformation and empowerment for Africans at the turn of the 21st century, the African Development Bank (AfDB) stands a world apart in terms of its vision, institutional resilience, partnerships, and courage to pursue significant innovations and policy that have continued to impact Africa’s development dynamics. Since its establishment in 1964, and for over five decades till date, the African Development Bank (AfDB) has consistently being in the forefront of assessing, articulating and delivering development insights and paradigms on the African continent. A very clearly crafted mission statement announces that the objective of the AfDB is “to spur sustainable economic development and social progress in its regional member countries (RMCs), thus contributing to poverty reduction.” And to be able to achieve this, the

AfDB recognizes the dynamic power of institutional innovation and collaborations. It has therefore constituted itself into a critical core of dynamic partnership with other institutional powerhouse on the continent, from the African Capacity Building Foundation (ACBF) to the African Export-Import Bank (AFREXIMBANK). The AfDB is one initiatives-rich institution that is constantly reflecting on multiple levels of development possibilities for Africa. However, and since the coming of its new president, Akinwumi Adesina, a new sense of intellectual boldness and initiatives have been offloaded into the existing development thinking of the AfDB. Under its new leadership, there is now an increasing concern with the governance variables on the continent, and the challenge of enabling and empowering good governance that could serve as the fundamental basis for the democratic experiment in Africa. The most recent of these new initiatives, which the president signaled in his acceptance speech, is the AfDB High5s— critical elements that are considered to be key to transforming the development efforts in Africa. These High 5s are: Light Up and Power Africa, Feed Africa, Industrialize Africa, Integrate Africa, and Improve the Quality of Life for the People of Africa. The energetic engagement with development, which the AfDB represents, through its even more energetic leadership, represent a deeper need to unravel the dynamics of governance and its connection with leadership. This is very core of the development predicament: the

challenge of transforming policies into those specific and transforming initiatives that, all together, constitute good governance that is felt tangibly by Africans. Central to the High 5s and their achievement, and as the leadership of the AfDB recognizes, is institutional leadership and its influence on performance and productivity. The usual trajectory in leadership studies is to focus on individuals as the drivers of governance and development. I will be adding another dimension to this tradition which has the capacity to deepen our understanding of the imperatives of good governance. This is the leadership of nongovernmental organizations like think tanks as the instigator of governance in Africa. Though these institutions operate a different organizational structures and agenda from formal institutions like the AfDB, I believe that they provide a very strong framework of experience from which we can learn and move the development and democracy agenda forward, adequately strengthened by the organizational and institutional capacity of the AfDB itself in the struggle to institutionalize and capacitate development on the continent. The fundamental issue that concerns me is the role of the AfDB, and African think tanks, in facilitating and establishing policy advisory systems (PAS) that will allow governments and nongovernmental organizations to work together as strategic policymaking partners. PAS are critical to the effort to define and redefine the

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PAS are critical to the effort to define and redefine the governance trajectory all over the world

governance trajectory all over the world. Governance is concerned with government’s ability to put policies and resources together in creative ways to empower the people. The traditional understanding of governance dynamics has usually been anchored on government and state actors as occupying the “commanding height” of determining governance variables. However, by the 80s and 90s, there was already considerable unease about the capacity of the modern state, standing alone, to entirely oversee the policy making processes and facilitate efficient and effective service delivery to the populace. From this period, governance failure characterized most African states. In fact, the Failed State Index (FSI) is constituted around the inability of state government to achieve governance goals and objectives. In the 2018 FSI, the usual suspects top the list of 178 states:South Sudan (1st), Somalia (2nd), Central African Republic (5th), DR Congo (6th), Sudan (7th), Chad (8th), Guinea (13th), Nigeria (14th), Ethiopia, Guinea Bissau, Kenya, Burundi, Eritrea (15th to 19th), Niger (21st), Cameroon (23rd), Uganda (24th), Cote d’Ivoire (26th), Mali (27th), Republic of Congo (29th), Liberia (30th). The list goes on.

Note: the rest of this article continues in the online edition of Business Day @https://businessday.ng Prof. Tunji Olaopa, retired Federal Permanent Secretary & Professor of Public Administration. tolaopa2003@gmail.com, tolaopa@isgpp.com.ng

Dear Lagos, before you demolish… Victoria Ibezim-Ohaeri

ast week, former Lagos governor, Senator Bola Tinubu, added his voice to the litany of pleas from diverse stakeholders urging the Lagos State government to demolish structurally unfit buildings in Lagos State. This call came on the heels of the building collapse at Massey Street, Ita-faji, Lagos Island on Wednesday, March 13, 2019, which claimed the lives of numerous school children. Senator Tinubu specifically urged the Lagos State Government to ‘fast-track the demolitions’. I can bet that most of these calls, including Tinubu’s ‘fast-track’ entreaty, were made in good faith. As these calls for urgent action persist, this article invites a sector-wide introspection and re-appraisal of the Lagos State’s demolition practices to gauge their compliance with best practices and legal requirements. This sort of collective re-appraisal is necessary to ensure the public’s clamour for building control do not provide justification for the state to conduct mass demolitions and evictions in settlements predominantly inhabited by urban poor populations without recourse to statutory safeguards. To begin with, there is nothing wrong with demolishing structurally-defective buildings. In fact, Section 47 of theLagos State Urban and Regional Planning and Development Law (LSURPDL), 2010 (as amended) empowers the Lagos State Building Control Agency (LABSCA), to identify and remove distressed buildings to prevent collapse. The agency is statutorily mandated to work with other relevant agencies to achieve zero tolerance on illegal developments. That means taking down buildings that

are structurally unsafe is not only legal, but also in the public interest to do so. An on-the-spot assessment of Massey Street in Ita-faji finds that many buildings in the area and many parts of Lagos Island are in very distressed conditions. Substantiated media reports corroborate that over 80 buildings in Lagos Island have already been marked for demolition. The casualty figures in the recent Massey Street building collapse make clear that the buildings in the locality, including those now marked for demolition, consist mainly of overcrowded apartments and lock-up shops, housing large numbers of households, businesses, and artisans who are predominantly poor. The population density in these neighborhoods is a telling sign of the impending homelessness of humanitarian proportions that would automatically flow from the scheduled demolitions. The massive dislocation of citizens, livelihoods and family ties that would ensue evinces that state agencies may not proceed with the demolitions as scheduled without appropriate engagement, human right safeguards and other necessary social welfare interventions. In other words, what is at stake at the moment is the imminence of housing deprivation, often involving the forcible displacement of thousands of urban poor populations. Are there other ways of achieving the same end—of building control and public safety in Lagos Island—less painfully? Is this even practicable or legal? An on-site assessment of the Ita-fajiarea shows that the entire locality is in dire need of urban regeneration and holistic infrastructure upgrading to improve the social, physical and economic environments. That 80 buildings in the area are marked for demolition lends credence to this observation. Lagos State’s major urban policy, specifically the LSURPDL, envisaged this kind of scenario and provided a

ready-made answer for addressing situations where urban sprawl has made decent habitation difficult. The LSURPDL empowers the Lagos State Urban Renewal Agency (LASURA) to propose redevelopment or improvement plans for degraded communities likeIta-faji, for the purpose of rehabilitating, renovating, or upgrading the physical environment, social facilities and infrastructure of the area. Where such plans are approved, the Agency has powers to declare the entire locality an Improvement Area, and then follow a set of laid-down statutory safeguards in carrying out the redevelopment plans. Please note that the law requires LASURA to develop this plan first, map out the areas targeted for redevelopment, secure approval for the development plan, and take certain harm-mitigating measures, before engaging in any dislocation operations. Let me break it down: In exercising its urban renewal authority, LASURA is required to issue enforcement notices to owners of affected buildings, uphold the right to fair hearing in dealings with affected residents and conduct its redevelopment operations with a human face. It is constrained to give twenty-eight (28) days formal notice of intent; to receive and attend to complaints and appeals on its propositions which must be finally determined before proceeding with the improvement plan. Other safeguards include strict adherence to the stipulated form of notice, organizing adequate sensitization for affected residents, constituting committees to receive objections and determine complaints, while the affected residents have the right to appeal agency decisions and receive compensation in certain circumstances. Under Section 55 of the LSURPDL, LASURA has far-reaching powers to grant, guarantee and/or facilitate the grant of loans for housing renovations to affected property owners in line with

area improvement plans.It is also vital forthe Agency to uphold the right to fair hearing in dealings with affected residents. The right to fairhearing, in particular, is a constitutionallyprotected right that cannot be derogated from. As these legal provisions disclose, the Lagos State’s LSURPDL law tames the power of the state to demolish at will, as currently planned in the wake of the Ita-faji incident.The Lagos State law clearly outlines what state agencies are required to do in the present circumstances. Citizens, including residents of the area, need to know what the state’s redevelopment plans are and key into them. In sharp contrast to these legal requirements, Lagos Governor Ambode visited the scene of the Ita-faji building collapse last week, and instantly vowed to demolish all illegal school buildings in the area and some structures marked unfit in Smith, Palm Church and Adeniji Adele Streets. Calling for demolitions without safeguards is an invitation to anarchy. As previous demolition practices in the state clearly demonstrate, official adherence to statutory safeguards is uncommon. Mitigation measures—including compensation, resettlement, or provision of temporary shelter, and humanitarian assistance—aimed at lessening the deleterious impact of mass displacement on vulnerable groups such as women, aged, and young children, are rarely ever considered and adopted. Demolitions should only happen within the confines of the law.

Note: the rest of this article continues in the online edition of Business Day @https://businessday.ng Ibezim-Ohaeri is the director of research and policy at SPACES FOR CHANGE (www.spacesforchange.org). She can be reached on victoria@spacesforchange.org

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Tuesday 19 March 2019

The Ita-Faji building collapse and absence of accountability

ast week Wednesday, March 13, a three-storey building housing a primary school collapsed at Massey Street in the Ita-Faji area of the state. According to reports, over 20 people, including no fewer than 12 pupils of the school died, while another 45 persons were said to have sustained various injuries and are being treated in hospitals. According to reports, the building, at 63 Massey Street, had already being marked for demolition by officials of the Lagos State Building Control Agency. However, the occupants with the connivance of corrupt state building control agency officials frustrated the demolition until the building eventually caved in. Shortly after, the Lagos state governor, Akinwunmi Ambode visited the scene and pledged to ensure that all buildings that have failed

integrity test in the area are demolished to forestall a repeat of the unfortunate incidence. True to his words, on Friday March 15, bulldozers roared into the area and began demolishing buildings already marked for demolition. As salutary as the governor’s swift actions and responses were, they were not enough and are rather symptomatic of everything that is wrong with us as a country – a country that is always reactive rather than proactive and a country where there is absolutely no accountability and no one is held to account no matter the grievousness of his/ her action. The state has a building control agency that should assess the integrity of buildings and ensure that those that have failed are demolished to prevent such collapses and loss of lives. In this instance, the agency did carry out its function and correctly marked the building for demolition. Then the Nigerian

condition set in. The agency could not proceed to demolish the building and a school continued to operate in the building even when it was visible to all that it was only a matter of time before the building caves in. Sadly, in the state government’s response so far, there have been no questions asked as to why the building and several others were not demolished before it caved in. There’s no investigation ongoing to determine all those who failed in their duty or are complicit in the collapse of the building and the loss of innocent lives, and there will certainly be no state official or private individual prosecuted for negligence of duty, corruption or circumvention of the law that led to the building collapse. No, none of these will happen. The governor just came, offered some platitudes, ordered demolition of marked buildings, possibly offered to offset medical bills of those injured and that will be the end of the

matter. Meanwhile, all those complicit in the building collapse will retain their jobs, will go scot free and will even move on to occupy higher offices and positions of authority and trust. They will be more emboldened to subvert the law and the common good knowing full well that there will be no consequences for bad behaviour. What is more, those down the ladder or those trying to do the right thing will see that there is no incentive for doing right and no cost for doing the wrong thing and will sooner than later join the corrupt and decadent gang, who have stocked years of impunity and corruption under their belt but are the most successful and rich. That has been the story of Nigeria and that is exactly why the country is the way it is: a haven for impunity. The result is that Nigeria is becoming a classical Thomas Hobbes’ state of nature where life has become nasty, brutish and short! May God help us!

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Trust is established when brands demonstrate competence, integrity – Experts … Ethiopian Airlines crash, Boeing communication on spotlight Stories by Daniel Obi Media Business Editor

ew days to the marking of global consumer day on March 15, 2019, a Nairobibound Boeing 737 MAX 8 operated by Ethiopian Airlines crashed minutes after take-off from Addis Ababa, March 10, killing all 157 on board. The crash and its communication management by Boeing was therefore largely on spotlight as some discussants who attended the consumer day organized by Brand Journalists Association of Nigeria in Lagos, viewed with mixed feelings the structure of communication by Boeing. Immediately after the crash on Sunday, Boeing said it is “deeply saddened” by the incident and promised to send a technical team to the crash site to provide assistance. It further said it would deploy a 737 MAX software “enhancement” across the fleet in the coming weeks incorporating feedback “received from our customers.” While discussing the central topic of Consumer day, ‘Building trusted brands’ some of the speakers said Boeing should show more compassion and responsibility. “The company has communicated but it should do more on its communication to connect with the people and

consumers considering the degree of loss”, Dare Ogunyombo, a PR expert said. “In my opinion, Boeing’s communication so far should be reviewed. At first, after expressing their sympathies to the families of the victims on the day of the incident, subsequent communication leaves a lot to be desired. For instance, I do not think Boeing’s statement that regulatory agencies and customers have made decisions that they believe are most appropriate for their home markets by suspending the operations of 737 Max, reflects the sober mood of the world in this instance. Do they expect the agencies and customers to act otherwise? “The company’s stand that they

do not also have basis to give further instruction to pilots, thereby continuing with flying 737 Max appears to be a subtle affront to the collective sensibilities of everyone. Now that the US government has joined others in suspending the operations of 737 Max, it would be interesting to know how Boeing addresses these issues in the coming weeks. In terms of building trust, particularly because this is the second incidence involving the aircraft within six months, Boeing should review their communications and better connect with the general mood at this time. I believe that will serve them better on the long run” This view was supported by others who said Boeing is expected to

World Sleep Day: Nigerians urged to engage in quality sleep for productivity, good health

resident of Nigeria Society of Physiotherapists, Rufai Ahmad has warned Nigerians who live in noisy environment to find ways to cope with the situation in order to have quality sleep, which he said is treasured for good health and productivity. Some of this noise pollution that disturb sleep is either generated by generators, music selling shops or worship centers around neighborhoods some of which violate the noise control laws. Rufai who spoke at the event marking World Sleep Day on March 14, 2019 in Lagos organized by Mouka Faom Limited suggested for ear plugs during sleep time. Ahmad who is from Bayero University said sleep fosters optimal brain growth and development, sleep regulates emotion, it strengthens resistance to infection and foreign bodies and improves productivity and overall quality of life. The CEO of Mouka Limited, Raymond Murphy stressed the fact that quality sleep is a treasured function and one of the core pillars of health. Murphy highlighted that when sleep

fails, health declines, decreasing the quality of life and this explains Mouka’s relentless commitment to providing the best mattresses, pillows and other products to enhance quality sleep. Corroborating Murphy’s claims, National President of the Nigeria Society of Physiotherapists (NSP), Rufai Ahmad stated that sleeping on a wrong mattress will alter the natural s curvature of the spine thereby resulting in musculoskeletal problems and possible injury. Emphasizing the importance of quality sleep to overall health at any age, the Senior Marketing Manager Mouka Limited, Tolu Olanipekun showcased Mouka’s range of products specially design for different phases of

life. From the Dreamtime mattresses for children which are water resistant and breathable, to the Regal orthopedic mattress, Mouka has different offerings from cradle to adulthood. Dimeji Osingunwa, the Commercial Director of Mouka Limited, expatiated on the features of Mouka’s Sleep Galleries. According to him, consumers can experience Mouka’s wide range of products while experts help them choose the right mattress, pillows, beds, beddings and other lifestyle products to suit their physiological needs, style and budget. Tobi Bakre, Big Brother Nigeria Season 3 finalist also joined the World Sleep Day celebration at Mouka Limited.

show much compassion. The lead speaker at the forum, Ugo Geri-Roberts, Head, Kantar Millward Brown Nigeria who also believed that Boeing should have been more compassionate in its communication architecture said trust is first established when brands demonstrate competence and integrity. Stating that trust is a journey enhanced by knowledge, Ugo Geri Roberts who has over two decades in consultancy said building trust for a brand starts from functional basics. This is when brands are capable of fulfilling their brand promise. There should also be motivational, emotional and aspirational. According to her, brand trust also has some levels. They include brand as reference-which means that a brand makes product that the consumer wants; brand as personality – which shows that the brand understands how the consumers want to feel; and brand as an icon – which means that the brand helps the consumer to be the person he/she wants to be. Other levels include brand as a company- where the brand exists to serve the particular consumer and brand as a policy- when the brand shares consumer values. In terms of trust, Ugo Geri Roberts advised that brands must be sensitive to the needs of their customers because “the fact that a consumer started with them does not

mean the consumer will end with the brand unless there is deep understanding”. According to her, brand is a pot of trust with many ingredients, maintaining that communication is key in building trust. “Marketers must find out the right people using their products and employ appropriate communication and channels as consumers need to be comfortable with brands”. While stating that there is no particular destination to building trust as it is a moving train, Ugo Geri-Roberts mentioned some principles to drive brand success in a competitive environment. This includes acting quickly to gain competitive advantage, being the first to mind when it matters, identifying what drives sales now and into the future. Other principles include being seen to be meaningfully different to drive profit and understanding where and how to invest in order to grow market share. In his comment, Bolaji Okusaga, managing consultant, Precise, a reputation management firm warned that trust is not built in price as “price is a function of the perception of value”. He said transparency and truth are ingredients of trust. He also advised that organisations should ensure they synchronise their communication structure with their communication culture in order to effectively build trust.

Maximedia Global Limited restructures, elevates key staff

aximedia Global Limited, one of Nigeria’s fast growing media independent companies with specialization in media strategy development, planning, channels buying and audit has announced the elevation of three key staff. They are Seyi Iwayemi, Isioma Okeleke and Ekpedeme Ufot. Before his elevation to Senior Group Head/Project Director, Seyi Iwayemi was the Group Head, Channel Management, charged with the responsibility for negotiations and media buying. Isioma Okeleke was elevated to Senior Group Head, Strategic Intelligence Planning. She was Group Head, Strategic Intelligence Planning. Her foray into the advertising industry a decade ago led to her garnering expertise as a media strategist and planner managing key accounts such as Stanbic IBTC Group and Beiersdorf with stints on GlaxoSmithKline and VISA in the first half of her career. Ekpedeme Ufot now heads the Innovations department. In his

new role, he will be responsible for driving the agency’s traditional and new media integration with the aim of delivering engaging and effective brand campaigns. In a career spanning over 10 years, he has worked in media planning and buying, outdoor and digital for clients like Guinness, Emirates, Access Bank, Unity Bank, Exxon Mobil, Jiji.ng, Travelstart, Betpawa and many others. His career set sail at SO&U Saatchi and Saatchi in June 2008 before he joined the foundational team at Maximedia Global Limited in April 2011. He holds a B.Sc. in Mass Communication from Ahmadu Bello University, Zaria; Senior Executive Masters Programme(SEMP) from the Metropolitan School of Business and Management (MSBM, London), amongst several short courses attended, locally and internationally. He is also a CRESTCOM Certified Leader. Ekpedeme is expected to bring his strategic and creative thinking prowess to bear on his new assignment.

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Tuesday 19 March 2019

BRANDING Coca-Cola System, LSETF empower 300 women in Lagos for entrepreneurship

o fewer than 300 women drawn from different communities in Lagos state have been empowered to start up their own small businesses. This is through the women empowerment initiative by the Lagos State Employment Trust Fund (LSETF), in partnership with Coca-Cola Nigeria Limited and its bottling partner, Nigeria Bottling Company Limited (NBC) in line with Coca-Cola’s 5by20 Programme which is the Company’s global commitment to enable the economic empowerment of 5 million women entrepreneurs across its value chain by 2020. The 300 women who are the first batch of the 1000 women targeted for the initiative were provided with Trade Assets including Coolers, Tables, Umbrellas and Coca-Cola beverage products, having completed their training modules on financial literacy and business skills. Speaking at the handing over ceremony in Lagos recently , the Executive Secretary of Lagos State Employment Trust Fund (LSETF), Akintunde Oyebode stated that the empowerment initiative is in line

with the vision of the Lagos state government to create jobs, wealth opportunities and alleviate poverty among residents in the state. Oyebode who commended the beneficiaries for their tenacity and determination to improve their lots economically urged them to judiciously put into use all the skills acquired as well as the resources mobilized for them While expressing appreciation to the two partners for their contribu-

tions in complementing government’s effort in the empowerment of women, Oyebode stated that such collaborations would ultimately help to reduce social problems and address the alarming rate of unemployment in Lagos State. . He also called on other private sector partners to join LSETF to create jobs in the State. Congratulating the beneficiaries on the completion of the trainings as well as the handing over of the

Nic’s Butchery, CCD Superstores enter into partnership to promote healthy lifestyle

ic’s Butchery has entered into partnership with CCD Superstores, a subsidiary of Nosak Group that will see the retail outlets stock Nic’s brand of fresh meat in all its outlets across Lagos State. The partnership is aimed at promoting healthy meat consumption in the state, reducing the use of overexposed meat and poorly handled imported or packaged chicken. Speaking on the partnership, the Managing Director of Nic’s Butchery, Bukola Mato in a statement said, “The partnership with CCD Superstores is a huge step in fulfilling our mission of providing healthy products to consumers across Nigeria. Majority of Nigerians are aware of the health implications of consuming imported chicken and beef products as most of them have

not been properly handled and preserved. We have always advocated for consumption of locally produced beef products and we are glad to know that Nigerians are embracing local poultry and beef products. This partnership is a right step in the right direction for us to make farm fresh products cut into unique sizes available to consumers who have become conscious of their healthy wellbeing.” She added that CCD Superstores will be stocking products such as Boneless Fish Cubes, Boneless Goat Cubes, and Shredded Beef from Nic’s Butchery in its outlets in Ogudu, Ogba and Bariga in Lagos. Other products will include Shredded Chicken, Beef Cubes and Minced Beef. Also speaking on the partnership, in the statement, the Executive Director, CCD Superstores, Iyobo

Innih disclosed that the retail market is excited to support emerging Nigerian brands. “We are glad to have a lot of local products from our people and our drive is to encourage them by way of partnership to retail the products in our outlets where they compete with foreign brands”. “The Nigerian market is developing rapidly with entrepreneurs investing in research and technological advancement to meet international standards. Nic’s Butchery’s impressive array of products will greatly support the healthy lifestyle we desire for our customers”, she said. Nic’s Butchery was established three years ago as online fresh meat delivery service in Gbagada, Lagos. It has since grown to become a consumer favorite servicing busy executives and catering businesses across Lagos State.

L-R: Eze Frank, sales manager, CCD Superstores; Bukola Mato, managing director, Nic’s Butchery and Iyobo Innih, executive director, CCD Superstores at the unveiling of Nic’s Butchery’s brand at the flagship CCD Superstores in Ogudu, Lagos.

Pepsodent advocates increased awareness on oral hygiene SEYI JOHN SALAU

assets, the Managing Director of Coca-Cola Nigeria Limited, Bhupendra Suri, represented at the event by Nwamaka Onyemelukwe, Public Affairs & Communications Manager, advised the women to make the best use of the resources handed over to them by effectively deploying the skills and assets in the running of their businesses profitably and sustainably. She also reaffirmed the commitment of Coca-Cola Nigeria to empowering Nigerian women through its numerous initiatives, emphasising that the company recognises the socio-economic value that women bring to enterprise development and urged other corporate organizations to consider Women Empowerment as a business imperative. One of the beneficiaries, Lolade Akingbade who expressed gratitude to all the partners for their support and donation at the handing over ceremony, promised to grow her business to become a big enterprise. ” We have been equipped with necessary skills over the last two months and we would deploy these skills into use in running our businesses” Akingbade added.

s the world marks oral health day, Pepsodent, oral care brand and advocate, has called for increased awareness on oral hygiene to combat poor oral health in Nigeria. World Oral Health Day (WOHD) is commemorated on March 20 every year, as an international day set aside to promote good oral health for everyone and empower individuals to maintain a healthy oral hygiene for all ages. Pepsodent, Nigerian Dental Association (NDA), Federal Ministry and State ministries of health alongside dental health practitioners will engage 2,000 school children on 20 March as part of efforts to promote oral hygiene, by brushing day and night. Salu Toluwaleke, the category manager, Oral Care, Unilever Nigeria, said poor oral health not only damages teeth especially children’s teeth, it can also lower self-esteem and harm performance at school. “According to a global study commissioned by Unilever Oral Care; published ahead of World Oral Health Day on March 20, shows that the quality of a child’s oral care can have an impact beyond obvious medical problems like bad breath and dental pain; it can also limit their potential and negatively impact their self-esteem,” said Toluwaleke.

BD Brand Talk

Can Television be over thrown? Mike Umogun

driver of building repeat purchase. (The fact that higher penetration is invariably related to higher repeat purchase is a fact often ignored by marketers, but, equally, this writer believes Byron and his colleagues gloss over the fact that some brands do manage to break this general trend and generate more than their fair share of repeat purchase.) Byron makes his case well and the following are a few points to take away: • Brands typically have a buyer distribution skewed to light, infrequent buyers. Therefore, advertising should seek to refresh memories and remind people about the brand. By aiming at the light user, you will also hit the heavy user. • The amount of time spent watching TV has been rising over time, but viewing is fragmented across more channels. Costs are rising because of the laws of supply and demand but this would not be the case for long as research by Kantar Millward Brown indicates …. Welcome to the era of integrated marketing communications and the emergence of social media. • Consumers pay to have hundreds of channels, but typically view no more than 15. The majority of viewing still goes to the major free channels. Why put your adverts everywhere one is tempted to ask? In the second part of this article this writer shall make the case for the new school that sees too much investment on TV as financial indiscipline.

he first TV station in Africa was established in Ibadan, Oyo State (Nigeria) in 1958According to the latest edition of media facts (2017) Nigeria’s TV credentials is very impressive for a third world country. We have over 120 plus terrestrial TV stations, 1 federal network NTA, 3 privately owned network (AIT, STV, Galaxy) 37 state owned stations and 36 private stations. There are over 137 satellite TV stations with a very buoyant pay TV business. Nigeria is indeed a TV power house in Africa . The expenditure on TV Above the Line in Nigeria is about N90 Billion. One is tempted to ask if the advertisers are getting return on their investment? Considering the amount face time given to our mobile phones and lap top computers. Shouldn’t the budget on TV be relooked for the purpose of making it more accountable and focused. There are 2 major schools of thoughts Leading the charge for the pro-TV camp was Dr. Byron Sharp, director, the Ehrenberg-Bass Institute for Marketing Science, University of South Australia. His basic premise is that TV is like many product brands – stable, mature and with little segmentation – but that its capability to build reach fast remains its core strength As a disciple of Professor Andrew Ehrenberg, Byron believes that reach Umogun works with Millward is the key driver of success in advertising, just as penetration is the key Brown, Lagos

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BUSINESS DAY

African desalination market set for growthFrost & Sullivan

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C O M PA N Y N E W S A N A LY S I S A N D I N S I G H T

BANKING

Big merchant banks record modest profit growth amid difficult environment BALA AUGIE

he largest Merchant Banks in Africa’s most populous nation have recorded modest growth across most financial indices even amid a difficult operating environment. They also maximised opportunities in their businesses to deliver sustainable growth at the bottom line (profit), thanks to increase in fees and commission, net gains on investment securities, and net foreign exchange gains, but interest income grew at a slow pace. The cumulative pretax profit of the largest Merchant Banks: Coronation Merchant Bank Limited and NOVA Merchant Bank Limited- spiked by 50.80 percent to N6.45 billion in December 2018 from N5.63 billion as at December 2017. However, combined interest income increased by 5.06 percent to N18.48 billion as firms were shy to turn on the tap on lending to the economy as they prefer to park their money in fixed income securities that offer attractive yields. “There could be some write backs in their profit and loss account. Last year was better for them because there were more trading activities,” said Ayodele Akinwunmi – Head, Research and Strat-

egy at FSDH Merchant Bank Ltd. “They were not exposed to foreign exchange risk last year because their dollar denominated liabilities matched dollar denominated assets,” said Akinwunmi. There was increase in foreign exchange and fixed income trading volumes, loan disbursement and echannel transactions which saw the combined noninterest income spiked by 83.12 percent to N4.68 billion as at December 2018. Ayodeji Ebo, managing director and CEO of Afrinvest Securities Ltd said though banks made money from trading income, investors would like to know whether they have sweated assets to generate more income. Investment banks have an excellent risk management strategy as they their customers have a lower risk profile and wellstructured balance sheet. In 2018, Coronation Merchant Bank deliberately increased its exposures to high quality obligors in Agriculture, Manufacturing and Oil & Gas sectors who fall within its risk acceptance criteria. The bank has maintained a zero non-performing assets in three year running while dollar asset base grew by over 100 percent; driven largely by self-liquidating trade

L-R: Suleiman Hussein Adamu, minister of water resources; Dayanand Sriram, general manager, RB West Africa, and Olu Falomo, chairman, RB West Africa, after the MoU signing between Dettol and Ministry of Water Resources for Dettol Clean Naija Program Launch in Abuja.

finance transactions that are well managed. Coronation Merchant Bank and NOVA Merchant Bank have a combined loans and advances to customers of N61.07 billion in December 2018, representing a 89.24 percent increase from N32.27 billion recorded last year. Rising yields on fixed income that reduced the attractiveness of deposit placement in the subsector has undermined Merchant Bankers deposit growth. The five largest merchant banks- Coronation Merchant Bank, FSDH

Merchant Bank, FBN Merchant Bank, Nova Merchant Bank and Rand Merchant Bank- grew their total deposits, year-on-year, by 51 percent to N3.74 trillion in 2018 from N2.58 trillion in 2017. The NBS data however revealed that the banks suffered quarter-on-quarter decline in deposit in the last two quarters of 2018. Analysis showed that deposits of the five merchant banks grew by 18.5 percent, quarter-on-quarter (q/q) to N850.9 billion in Q1’18 from N718 billion in Q4’17. Deposits

however grew at a slower rate of 14.5 percent (q/q) to N970.3 billion in Q2’18 from N850.9 billion in Q1’18. “Merchant banks continuously adjust their deposits according to interest rates. During a given year we will see merchant banks’ deposits rise and fall as they choose to participate in wholesale money markets, or leave them alone,” said Guy Czartoryski, Head of Research at Coronation Merchant Bank Group. “This is unlike commercial banks, which create retail and corporate

deposit bases and need to continuously maintain a high level of deposits. “Of course, over a long period of time merchant banks will grow their overall level of deposits in order to match their level of risk assets, in other words, as their overall businesses grow. But even on a oneyear view, the deposit level can fall,” said Czartoryski. The audited financial statement of NOVA and Coronation shows combined total deposit was up 65.34 percent to N144.84 billion in December 2018 from N87.60 billion the previous year.

attempt by the banks to take over the telco was blocked by the Central Bank of Nigeria (CBN) and Nigeria Communications Commission (NCC) In addition, customer deposits surged 14 percent to ₦2.57trn in 2018 as compared to ₦2.25trn

in the same period 2017. Current and savings account deposits grew 19 percent year-on-year to ₦1.3trn compared to ₦1.1trn in December 2017, buoyed by massive deposit mobilization drive for sustainable lowcost deposit growth

BANKING

Access bank gives big update on Etisalat loan FIKAYO OWOEYE

ier-1 lender, Access bank, has revealed that the value of loan incurred from the troublesome Etisalat deal has reduced by 62.8 percent from N70 billion at the initial stage to N26

billion as the loan haircut has been written off. In a conference call to investors and analysts, officials of the bank noted that the bank’s NonPerforming Loan ratio was down by 230 basis points to 2.5 percent in full-year 2018 as against

4.8 percent in the same period 2017. The repayment of the Loan by Etisalat saw a reduction to a meager 0.9 percent in the Information and communication sector compared to a whopping 57.6 percent in 2017.

Recall that Etisalat Nigeria had in July last year defaulted on a $1.2 billion loan, it took from a consortium of banks. The firm blamed its default on the sudden devaluation of the Naira against the dollar last year. An

Edited by LOLADE AKINMURELE (loladeakinmurele@gmail.com) Graphics: David Ogar

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Tuesday 19 March 2019

COMPANIES & MARKETS MARKET

These stocks delivered most value to investors last week OLUWASEGUN OLAKOYENIKAN

he release of earnings results for the 2018 financial year by listed companies failed to lift Nigeria’s stock market last week, rather the market dipped further by 2.45 percent to settle at 31,142.72 points. That drove the return of the Nigerian Stock Exchange back to the negative territory of -0.92 percent after the close of business on Friday, causing investors to lose over N291 billion of their wealth to the rout. In spite of the bearish performance at the Lagos bourse, eighteen companies could deliver value to their shareholders, forty-five firms were caught in the flood of losses recorded in four of the five trading days, while one hundred and five equities remained unchanged during the week. Cap Plc led the gainers’ chart for the week, recording 10 percent to close at N37.40. The company was closely fol-

lowed by McNichols, which rose 9.62 percent to close at 57 kobo; Royal Exchange increased by 9.37 percent to 35 kobo; Cadbury, 9.09 percent to N12; UAC-Prop, 7.14 percent to N1.95; Neimeth, 4.69 percent to 67 kobo; while Mutual Benefits gained 4.35 percent to close at 24 kobo. Nem Insurance garnered 4.17 percent to settle at N2.50; Consolidated Hallmark Insurance, 3.57 percent to 29 kobo; while Nascon Allied appreciated by 3.50 percent to N20.70. On the flipside, Africa Prudential was the biggest loser for the week, dropping 20.83 percent to close at N3.80. FCMB trailed with 12.74 percent loss to N1.85; Zenith, 11.82 percent to N22; International Breweries, 10.93 percent N24.05. Wema Bank’s market value slumped by 10.47 last week to settle at 77 kobo. Unity Bank and Jaiz Bank dipped 10 percent to close at 81 kobo and 54 kobo, respectively, while Learn Africa, which opened at N1.45 lost 9.66 percent, bringing its share price lower

to N1.31. Similarly, UPDC Real Estate plunged 9.24 percent to N5.40 and Transcorp Hotels declined by 9.24 to N5.40. During the week, FBN Holdings, Zenith Bank and Diamond Bank Plc were the most traded stocks, accounting for 551.865 million shares worth N6.60 billion in 3,116 deals and contributing 49.60 percent and 49.03 percent to the total equity turnover volume and value respectively. Both Access Bank and United Bank for Africa (UBA) released their 2018 financial results during the week. The tier-one lender grew its gross earnings by 15.17 percent to N528.7 billion, pre-tax profit increased by 32 percent to N10319 billion, while profit after tax surged 58 percent to N94.98 billion. UBA on the other side could only grow its gross earnings by 7.04 percent, its profit before tax rose by 1.37 percent to N106.77 billion, while it recorded a paltry growth of 1.37 percent in its post-tax profit to N78.61 billion.

Tuesday 19 March 2019

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BUSINESS DAY

COMPANIES & MARKETS COMPANY RELEASE

FINANCIAL INCLUSION

African desalination market set for growth-Frost & Sullivan MIKE OCHONMA

study conducted by Frost & Sullivan has found that the desalination market in Africa has recovered from the global economic downturn between 2015 and 2017, which had resulted in low investment in desalination across the continent. The firm’s study revealed that the African desalination market is stabilising and that investment in desalination is gaining traction. “By 2030, 35% of the world will be living in water-stressed countries,” says Frost & Sullivan industry analyst Laura Caetano. According to her, the African desalination market will grow at a compound annual growth rate (CAGR) of 10.7 percent between 2017 and 2022. Out of the 54 countries in Africa, 39 have a coastline,

making desalination the logical solution, but the high cost of capital expenditure (capex) and operating expenditure (opex) prove to be a major restraint to the development of the desalination market in Africa. The study finds that North African countries are the primary users of desalination, holding 79.9 percent of Africa’s desalination capacity. North Africa is expected to maintain its dominant position in the market with high forecasted growth. Sub-Saharan Africa (SSA), on the other hand, is expected to achieve low to moderate growth in desalination capacity up to 2022, owing to the high capex costs associated with desalination plants, paired with the low water infrastructure spend in the region. Frost & Sullivan notes an increasing interaction between the private and pub-

lic sectors when it comes to infrastructure development, resulting in a growing number of public–private partnerships (PPPs) to fund desalination projects in future. Caetano avers that high population growth, prolonged drought conditions across Africa, old and inefficient water infrastructure and an increase in PPPs are the major driving forces behind the growth in the desalination market. However, low water infrastructure budgets and low power availability will continue to restrict potential market growth in sub-Saharan Africa. Mitigating measures through the use of renewable energy to power plants and the installation of energy recover devices are growing in popularity and significantly reducing the high opex costs associated with desalination, making it an increasingly realistic option for sub-Saharan Africa,” she states.

UBA reports N400mn donations for financial inclusion in 2018 …total donations surge by 25.8% year on year DAVID IBIDAPO

he United bank for Africa (UBA) showed its commitment to deepening financial inclusion in Nigeria with a N400 million donation. This was stated in its 2018 full year financial report released on Friday, which showed, of a total of N1.03 billion donations in Nigeria, commitment to financial inclusion and public enlightenment project, accounted for 38.7 percent of total donation value. As stated in the directors’ report, donations by the group was targeted to, ‘‘commitment to the development of host communities, the environment and broader economy.’’ According to figures by the Enhancing Financial Innovation and Access (EFInA), financial sector development organisation as

compiled from its results of the 2018 Access to Financial Services (A2F) Survey, Nigeria’s financial exclusion rate reduced from 41.6 percent in 2016 to 36.8 percent. To this end, with less than two years to meet its 80 percent financial inclusion target which currently stands at 36.8 percent, the Central Bank of Nigeria (CBN) approved the setting up of a financial inclusion Trust Fund to help drive its course. Meanwhile, UBA’s total donations across the group amounted to N1.048 billion, with N1.03 billion in Nigeria and N15.14 billion in the rest of Africa. Among other expenses entries, UBA’s donations year on year increased the most. Total donations increased by 25.8 percent against N833 million donations in 2017 recorded by the tier one lender. However, this accounted for about 1

percent of total expenses for the period. The tier-one lender recorded a profit after tax (PAT) of N78.6 billion, a marginal increase by 1.36 percent from previous income recorded in 2017. G ro w t h i n PAT w a s slowed down by a 9 percent increase in total expenses for the period to N225.89 billion against N206.6 billion in 2017. UBA declared a final dividend of N0.65 for every ordinary share of 50 kobo each, bringing the total dividend to N0.85 per share for the 2018 financial year ended December 2018. As at the close of market on Friday, UBA’s stock dipped 2.61 percent to N7.45 with a market capitalization of N254.78 billion. Year to date performance revealed stocks is down 3.25 percent, underperforming the Nigerian All share index.

Tuesday 19 March 2019

BUSINESS DAY

The Big Picture The mistakes people make in romantic relationships are often rooted in two things: A. Having an undefined objective (Why do I want this person? What do I want this person for?) B. Allowing for misunderstanding or misinterpretation (Are we both seeing the same version of events?)

RUTH DAVID

n dating, these two oversights often result in what I call D&D: distress and distrust. Those emotions are familiar to many Nigerian business owners who have tried to staff their companies. However, at WAVE we have learnt that avoiding D&D is possible: Step 1: Figure Out The Job Description In recruitment most of us start with a fundamental mistake: we don’t flesh out our objective. We come up with positions and then try to find people to fill those roles. Admin Manager. Receptionist. Cleaner. We forget that, because the work done by these people differs from company to company, those titles can be ambiguous. The foundation of a successful recruitment effort is figuring out what we need so we have a clear picture of the JTBD: job to be done. Then, creating the list of tasks that will accomplish that goal. Completing the pieces of work from that list of tasks, frequently and capably, is what you require from your hire. It is literally “the job.” So, the writeup/articulation of that list of tasks is your job description. It is attuned to the specific set of duties dictated by the unique nature of your company. A job description states what

your needs are. If you do not know your needs, trying to find the people to fulfill them is a counterproductive exercise. Step 2: Outline The Required Competencies Fulfilling needs require skills. So, having figured out the JTBD (job to be done), you can now decide what capabilities are necessary to get that job done. Since you are now able to make clear requests, you are able to ask for clear competencies. You can demand specific skill sets for your specific context. By making it clear to people what they need to have in order to get the job done, you filter out the ones who do not have what it takes. Step 3: Assess And Audit Your Organisation After you have decided your wants and needs, it’s time for give and take. You want Competencies ‘A,’ so Task ‘B’ gets done well. Well, what are you offering in exchange? When you ask a friend or family member to introduce you to a romantic prospect, you choose an emissary who can speak to your strengths and weaknesses. Your emissary goes to paint a picture of you to the person you are interested in, so the person can decide if you are worthy of their attention. The same scrutiny is at play in the hiring process. You’re not just picking them; they are picking you. They are weighing whether what you can offer is as good as, or better than,

the other options available to them. As a result, it is essential that you ask yourself this question: “Why should anyone want this job in my company?” Answer it honestly. Step 4: Formulate A Value Proposition When you have assessed what you have to offer, you can now measure how you will provide it. Prospective employees’ decisions are based on a simple premise: “What’s in it for me?” (WIIFM). They need this question answered from the onset. The response you give to WIIFM is your value proposition; the things you are promising to supply in order to meet the prospective hire’s demands. You’ve looked at your business objectively and know what you bring to the table. You know what makes you attractive. Now,

you are tasked with devising the way in which you frame your positive attributes. Step 5: Communicate Your Value Proposition How you sell yourself is what makes or breaks your business. We all know this. We spend a lot of time creating our ‘sales pitch’ for clients/customers/investors. We do not do that for prospective talent. That is ironic because, without first communicating our appeal to competent hires, we deprive ourselves of the human capital to make good on the sales pitch we gave to the clients/ customers/investors. If you do not clearly communicate what differentiates your business, so people have the opportunity to accurately measure those differentiators

against their motivators, you do both them and yourself a disservice. To be competitive, you have to understand and advertise the qualities that make you the most attractive choice. Step 6: Ensure Cultural Alignment If you do attract job seekers who fit your profile, you have reached the point where you have the power to pick and choose who is the best match. When making that judgment we usually prioritise competencies. Makes sense: need something done, pick someone who can do it. Sadly, a hire having the necessary skill set is not the magic bullet. What is most important in hiring decisions is cultural alignment - the degree to which the person you have chosen can successfully deliver what you need, in the environment your business has created. It might sound like a mouthful but what you are measuring is fit, what we’d call ‘compatibility’ in dating. Do your core values, beliefs, and behaviours line up with those of this person you think is ‘The One’? Or will the whole thing end in D&D and leave you right back where you started?

•Ruth David is the Partnerships Coordinator at WAVE, an organization focused on rewiring the education-to-employment system to create a level playing field for every African youth to access the skills and opportunity to become what they imagine.

Thanks for asking – 1 HAL GREGERSEN

riends, every day I wake up with awe at the incredible power of questions. I’ve been meaning for some time to share, on a monthly basis, the best examples and insights of inquiry-led leadership I come across, as well as ideas I’m working on that could use your feedback. What better time than now to start? Here are a handful of updates I hope will help you uncover bigger, better, and bolder questions (and answers) in your own life. First, the big news, and the reason I can finally turn my attention to this task … drumroll, please … my book, Questions Are the Answer: A Breakthrough Approach to Your Most Vexing

Problems at Work and in Life, is off to the printer and comes out November 13. Thank you, HarperCollins, and thank you in advance, friends, for reading. You can pre-order it here. I promise to sign your copy next time I see you! At the 2018 Global Peter Drucker Forum, taking place in Vienna, November 29-30, one of the plenary sessions is “Human Questions, Machine Answers: The Blended Future of Work.” A great panel will be focusing on how artificial intelligence will transform enterprises. To me, the title says it all: framing the right questions will become more important than ever— and will remain a very human strength. Consider joining us (and don’t wait too long to register—the Drucker Forum sells

out every year). It’s been great to see Harvard Business Review continuing to cover the “questions” beat. Over the summer, I especially enjoyed Alison Wood Brooks and Leslie K. John’s “The Surprising Power of Questions.” What a great idea to do a research study of speed dating—and what a great finding that “Among the speed daters, people were more willing to go on a second date with partners who asked more questions.” Why does everything sound more profound when it’s translated into French? Especially for my old colleagues and friends at Insead, I can’t resist sharing the version of “Better Brainstorming” (my recent HBR piece) that came out in the magazine’s French edition. “Brainstormer

en cherchant des questions plutôt que des réponses permet plus facilement de dépasser des biais cognitifs et de s’aventurer en terrain inconnu.” Wow—I could not have said that better. Finally, let me recommend Francesca Gino’s new book, Rebel Talent: Why It Pays to Break the Rules at Work and in Life. I didn’t have to skim far to discover this was a book I wanted to read deeply. Gino is focusing here on the “deviants” among us who drive positive, constructive change. That is: “People who question their own assumptions and strongest beliefs, as well as the widely accepted norms around them, to identify more creative, effective ways of doing transcendent work.” It’s an inspiring read. That’s probably enough for a

first edition of Thanks for Asking. You probably don’t need to be reminded that the topic of learning to ask better questions is the focus of my work. It’s key to high-impact innovation in businesses, and much more broadly to making progress in all aspects of life. I promise to keep these updates short, and hope to make them valuable. Please feel free to forward this to anyone in your own network who likes to think about creative problem-solving.

•Hal Gregersen, is Executive Director at MIT’s Leadership Center and a senior Lecturer in Leadership & Innovation, MIT Sloan School of Management. He is author of up coming book, Questions are the answer.

BUSINESS DAY

Tuesday 19 March 2019

On tour with the MBA students of fine wine

Burgundy Business School brings its oenophiles to London to sample a key global market

JONATHAN MOULES, FT

he London study tour for Burgundy School of Business’s specialist MBA for the wine industry is a disappointment in one significant way: the amount of alcohol consumed by participants is minimal. Despite starting early, with a tight schedule of meetings with retailers, producers and auctioneers of top vintages, it is one o’clock before we are served our first glass. The 18 students, drawn from India, Taiwan, Vietnam, Russia, Hong Kong and the US, are nonetheless very excited about their excursion from France’s premier wine region to one of the world’s key markets for buying and selling rare vintages. “The trips are the reason I think most people here signed up for this course,” says Zita Hu, from China, who moved to France to study on the 16-month Burgundy programme with the intention of starting a business afterwards. “I could have done a regular MBA, but it is so dry,” she adds. Although some say they hope to get jobs within the wine trade, going it alone is also a popular choice. Chiara Zen, who ran a pet treatments company in Rome before moving to France for the MBA course, introduces herself as a “third-generation entrepreneur”. She hopes her qualification will ease her way into a career in the sector by learning from some of the key players in the market and building a network. “The wine industry is very competitive and complicated,” Ms Zen says. “This [trip] enables us to have direct contact with the industry, visiting stores and feeling . . . the environment around you.” I join the group midway through a packed five-day schedule taking in two wineries in the south of England, two wine importers, the retailer Majestic, the auction house Christie’s and Hedonism, a fine wine and spirits boutique in Mayfair. Lunch is at Vagabond, a small wine bar chain with an

MBA connection, selling premier wines by the glass from specially-designed vending machines. Its founder, Stephen Finch, hit upon the idea after relocating from New York to study at London Business School. “Moving from the US to Europe I had hoped the wine would be better, but instead I discovered it was atrocious,” he says with a grimace, adding that his ambition is to wean British consumers off “five quid supermarket reds and whites” bought on the way home from work. “This is a way to educate wine fans.” Each of Mr Finch’s five central London outlets offers more than 100 sommelier-selected vintages, which customers can enjoy at a table with food, or buy by the bottle to take home. “Wine is a weird thing, in that you buy before you know what it is like, which makes it a purchase based on fear of the unknown,” Mr Finch says. “We hope to break that by allowing people to sample the wine first.” The MBA party is escorted by their tutors to the newest branch of Vagabond on the edge of the Battersea Power Station redevelopment, soon to be home to Apple’s European base and a lot of luxury flats. The fit-out includes vats that enable Mr Finch to make his own wine on site using grapes from English vineyards. The MBA group are given preloaded smart cards to operate the machines and spend a very pleasant couple of hours sampling the wine selection with plates of meats and cheese.

Over lunch, Mr Finch claims that his generalist MBA helped him understand how to speak to investors — and avoid classic founder mistakes, such as running out of cash. “I had to write an 80-page business plan so it helped that I had that formal training,” he says. Aside from wine, the students seem keen to understand the impact of the UK’s planned exit from the EU. One concern is that the additional bureaucracy could make the London tour unviable for future Burgundy MBA students, who are already paying £16,150 each the course, and giving up full-time jobs to focus on expanding their knowledge. Jacques Thébault, the wine MBA programme director, believes that the UK will still be important : the country “remains at this point the most competitive wine and spirits consumer market in the world, with an unparalleled offer, demanding consumers, and a very dynamic distribution scene”, he says. Wine is one of several specialist MBA courses focused on a particular sector or passion, such as entrepreneurship, healthcare and data science. These degrees have boomed in recent years, partly as a way to help students move into new careers, but also to make lessons more practical. Wine is an understandably popular choice, now offered by schools in the US, France, Germany and Australia. The highlight of the tour with the Burgundy students is a meeting in the Georgian splendour of a private dining room at Christie’s, the auction house, whose first sale in 1766 included a consignment of wine. Tim Triptree, international director in the wine department, tells us that he was appointed to his job 13 years ago in part on the strength of a wine MBA from the Royal Agricultural University in Gloucestershire. For much of the past decade, he has been studying part-time to complete a thesis on champagne for the prestigious master of wine qualification. “I know what you are going through,” he tells the Burgundy students.

MBA class sizes: Is there an ideal number? Schools aim to balance the benefits — and drawbacks — of scale

ig or small? Is there an will run MBA class sizes of beideal figure for teach- tween 15 and 25, which Zahir ing numbers on an Irani, dean of the school of MBA? A large intake management, law and social might indicate a school’s pulling sciences, says is about right for power, provide greater network- such a course. “Any less than ing opportunities and draw em- 12 is definitely too small,” Prof ployers to recruitment events. Irani says. “Too many people At the same time, breaking and individuals will struggle to down a big group into smaller get air time in class to express classes can foster intimacy and their views.” Schools like Tuck intensity of experience. One in- are making a virtue of small stitution that has succeeded on MBA class sizes but still with both counts is Dartmouth Col- a large overall intake of stulege’s Tuck School of Business dents each year. Tuck’s small in New Hampshire. It is notable study groups are part of an anamong the elite of MBA provid- nual intake of about 280 fullers in the US for two reasons. time MBA students — a figure First, it was one of only two of necessary to attract the best the “magnificent seven” leading employers of graduate talent, US business schools to see an according to Prof Slaughter. increase in applica“We cannot be too tions in 2018, when large [so that we] most institutions in compromise the the country were hit values of our MBA We cannot by flat or declining be too large education,” he says. demand. Second, the “But we cannot be [so that we] school distinguishes too small [so that itself from its peers compromise we] lack the presby actively managing ence for companies the values its admissions to enwe want to be part of our MBA sure small MBA study of our ecosystem.” classes of 12 people. That is comparable education These two achieveto the programmes ments are not unreat the University of lated, says Matthew Slaughter, Oxford’s Saïd Business School Tuck’s dean. “The human scale in the UK. The school mainfacilitates better learning in the tains MBA classes of about 80 MBA class because it fosters a students but an annual cohort greater development of trust of 320, according to Kathy and collaboration,” he says, Har vey, associate dean for adding that this intimacy en- MBA and executive degrees. courages students to be bolder The school also varies the way in sharing thoughts they might the students interact, from otherwise keep to themselves groups of six for in-depth disand to challenge one another cussions to whole-class case more rigorously. Smaller class discussions where a broader sizes have become a reality range of views are expressed. for many business schools in “Matching the group size to recent years, though often not the task enhances the stuout of choice. Declining MBA dents’ experience,” Har vey application numbers in the US says. In contrast to the Tuck have forced schools to accept approach, an intake of MBA fewer students or compromise students might be taught in the quality of their intake. In one large class, with hundreds extreme cases, this has led to a packed into a lecture theatre spiral of decline. The University at once. In this context, class of Bradford in the north of Eng- size can be an emblem of elite land closed its full-time MBA status, but it conveys different in 2013 after falling demand meanings at different business meant the intake dwindled schools, says Stacy Blackman, from more than 100 students an admissions consultant. a year to the low double dig- “For Stanford, a small class has its. The school now operates led to greater exclusivity and a a mixture of executive MBA more competitive programme programmes and a part-time in terms of admissions,” says course funded by the appren- the founder of MBA admisticeship levy all UK employers sions agency Stacy Blackman with an annual wage bill of £3m Consulting. “For Harvard Busior more must pay into. ness School, filling a big class At any one time, the school is proof of the great demand.”

‘

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Tuesday 19 March 2019

EDUCATION Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Poor learning outcomes, slow education policy implementation stifle competitiveness Stories by KELECHI EWUZIE

igeria’s inability to address challenges around her learning outcomes which is one of the poorest in the world and the slow pace of government to implement the right policy are major constraints to achieving competitiveness in education sector. Educationists describe learning outcomes as significant and essential learning that learners have achieved, and can reliably demonstrate at the end of a course. They are worried that the pitiable state of primary and secondary school levels of education in Nigeria is characterised by over-crowding in schools, reduced quality of staff, inadequate facilities in school. Above all, there is the problem of an absence of an academic standard that will develop pupils who are at par with their counterparts globally. Nigeria sadly boost of one of the highest numbers of out of schools’ children in the world. Estimated at over 13 million, this is a disproportionately higher percentage compared to other countries.

“We lack all the four-key school-level ingredients for learning: prepared learners, effective teaching, learning focused inputs, and the skilled management and governance that pulls them all together” Hakeem Subair, founder of the One Million Teachers Project in an interview with BusinessDay said. He opines that it is shameful and appalling that the largest oil producer in Africa and the sixth in the world would find

itself in this mess. We cannot even boast of any strong sector, this is shameful Florence Obi, former Deputy Vice Chancellor, University of Calabar, says statistics from Nigerian Bureau of Statistics shows a 23.1 percent unemployment rate as of Q3 2018 which only goes to show that education sector is on a downward slide. According to her, “It is worrying that Nigerian graduates are unemployable and no Ni-

Covenant VC, experts list attributes teachers of the future should possess

deremi AaronAnthony Atayero, vice-chancellor, Covenant University Otta, Ogun State and education experts have urged teachers of the future to be technology-savvy, innovative, thoughtful and collaborative among others. They made this known in their various presentations at the 2019 Edustart Summit with the theme, ‘The Future Teacher’ hosted by Covenant University. Atayero in his presentation opines that teachers of the future would be those who could successfully impart skills for critical thinking towards lifelong learning, adding that they would be those adept at teaching how and not what to learn. The university don observed that the education of the future was a nebulous terrain that nobody could say with 100 percent certainty what its future would be. He however said that Cov-

enant University as a 21st century citadel of learning is mindful of her place in shaping the education of the future. “The educational institution of the future has no walls, the future teacher is a global citizen, and he must be able to reach different people of different nationalities”, he said. Modupe Adefeso Olateju, director, TEP Centre, said that the factors to consider for effective teaching and learning were the physical environment, the curriculum and its assessment, quality assurance and support systems. Olateju in her presentation titled, ‘How Teaching Should be Done’ said other factors that can shape teaching and learning includes teacher supply, training and development, accountability mechanisms and processes, links and partnerships with parents and community, school leadership, internal organisation and culture, and

the well-being, attendance and motivation of all pupils. According to her, “School leaders must instill passion in teachers and motivate teachers to engage learners. A teacher should strengthen learners’ self-belief and create mentally stimulating educational experiences. Communities should be considered as the ecosystem within which teaching and learning is situated, and schools must maintain requisite or stipulated levels of quality in the school system. Earlier in his welcome remarks, the initiator of the summit, Stephen Oluwatobi, asserted that in order for a nation to achieve sustainability, there must be a National Plan, Manpower Plan and Education Plan. He stated that the future of any country depended a lot on teachers as the quality of governance demonstrated by the leaders of a nation reflected the quality of teaching accessible to the leaders.

gerian university featured in the world’s best 500 universities adding that in the African continent, the best Nigerian university trails some universities in Kenya, South Africa and Ghana. Speaking to BusinessDay, Obi says the current education situation goes without saying that any country serious about preparing its future generation to be competitive in the global job market will ensure her children are

actively engaged by investing in a sector as pivotal as education. To her, “Quality and sustainable education has the potential to create employment, improve wellness, and create a well-informed or politicallyinformed citizenry” Education professionals and economic stakeholders are of the views that for Nigeria to attempt a solution to the worrying education challenges there is need for managers of the education sector to give learning the attention that it deserves. They aver that this involves using well-designed student assessments to gauge the health of our various education systems at local and national levels and providing actionable information to stakeholders about what is going wrong in their schools and in the broader society, so they can craft context-appropriate responses to improve learning. “We need to align all stakeholders - recognising that all the classroom innovation will have little impact, if, because of technical, cultural, political, and other barriers, the system does not support learning”, they said. By considering these barriers and mobilising everyone

who has a stake in learning, we can support innovative educators on the front lines. To be aligned, parts of the education system must be coherent with one another. Alignment implies that learning is the goal of the various actors or components in the system. Coherence means that the components reinforce one another in achieving whatever goals we have set. When systems achieve both alignment and coherence, they are much more likely to promote student learning. The need for coherence means Subair further opines that to revive the ailing education sector, we must have, at the school level - prepared learners, effective teaching, learning focused inputs, skilled management and governance that pulls them all together. “And we must align all actors - recognising that all the classroom innovation in the world is unlikely to have much impact if the system does not support learning”. “I would say that everything should be centred around teaching and learning. School inputs, management, and governance must be geared towards enhancing the learner-teacher relationship if they are to improve learning”, he said.

Stakeholders laud private sector investment in Mathematics education

takeholders in the nation’s education sector have commended Promasidor Nigeria Limited for consistently promoting the study of Mathematics, the result of which is reflected in a record participation in this year’s Cowbellpedia Secondary Schools Mathematics TV Quiz Show. A total of 56,073 students sat for stage one examination of the competition. This marks a 34 per cent increase over the 41,730 students who took part in the examination last year, when the registration format became strictly online. The competition has witnessed progressive increase in participation in the last four years, during which period 195,474 students had featured in the Stage One examinations. Yinka Ogunde, managing partner, Edumark Consult and Co-ordinator of Concerned Parents Network, lauded the efforts of the company in nurturing young

talents through the Cowbellpedia initiatives. She enjoined other corporate organisations to emulate the brand’s noble gesture, which has been of great benefit to the society. Agboola Alphonso, an education psychologist based in Ibadan, Oyo State said that the Cowbellpedia projects have been wonderful in stimulating the interest of young students in Science, Technology, Engineering and Mathematics (STEM) subjects. “I move round the state, from Ibadan to Iseyin and even to Abeokuta, Ogun State in the course of my work, and what I have seen about the Cowbellpedia effects have been wonderful. I salute the efforts and pray for more strength for the company and Cowbell milk,” he said. On her part, Morenikeji Sowemimo, whose son participated in the examination in an Ogun State centre, also commended the initiatives and its impact on her child. She explained that the com-

petition fired up the interest of her child in the subject and it eventually paid off in his West African Examination Council (WAEC) and the Joint Admission and Matriculation (JAMB) examinations. The result of stage one examination is expected to be announced in June with the best 108 students (54 each for junior and senior categories) proceeding to Stage Two, which is the Television Quiz Show. That will be in a quiz format and further sub-divided into preliminary, semi-finals and final rounds. The show will be serialised into 13 episodes and aired on major television stations across the country. In flagging of the competition last year, the Managing Director of Promasidor Nigeria, Anders Einarsson had announced that the ultimate prize is N2 million plus and an all-expense paid educational excursion outside the country. The first and second runners-up will go home with N1.5million and N1 million respectively.

Tuesday 19 March 2019

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BUSINESS DAY

EDUCATION Focus on special education: Community-Based Instruction

Isaac Osae-Brown

esearch reveals that Communitybased instruction (CBI) is a strategy or instructional method that promotes the teaching and use of academic and functional skills in the student’s natural environment. The setting, as well as the tasks performed in these settings, should be relevant to the student, facilitate independence and be age appropriate. Community-based instruction (CBI), a hands-on learning program located within the community, is a critical component of the education program for students with disabilities. This is primarily because, as adults, the community is where they will need to use the skills acquired during their school years. Trips to

community locations occur concurrently with classroom instruction. Although students may initially learn and practice a skill in the classroom, they will eventually practice the skill by applying it in a home or community setting. For example, a student who learns math skills in the classroom may later practice those skills during a shopping expedition. The main purpose of Community Based Instruction is to train students in a natural community environment to live, work, and recreate as independently as possible. Community-based instruction (CBI) is comprised of teaching opportunities with targeted instruction on a consistent basis. The American with disabilities Acts (ADA) was signed into law in 1990 to prohibit any form of discrimination against persons with disabilities. This important piece of federal legislation also requires most public and private accommodations, buildings and transportation systems to be accessible to persons with disabilities. Government agencies and

committees on employment of people with disabilities bring together information about practical steps employers can take to make accommodations for the functional limitations of applicants with disabilities. In some African countries like Nigeria, students and individuals with disabilities are often not encouraged to participate in complex activities of daily living due to their dynamic disabilities that limit cognitive and functional engagement in their schools and communities. A large number of school leaders do overlook the importance of community-based instruction and forget to provide professional development to teachers in this field. Research reveals that community-based instruction can help augment students’ executive functioning and improve adapted behaviour. In order words, individuals with disabilities if exposed to community-based instruction will get along in their environment with greatest success and least conflict with typical peers.

KELECHI EWUZIE

enior Secondary students across Nigeria have an opportunity to test their literary skills as entries for the Mike Okonkwo National Essay Competition opens. The competition is one of Mike Okonkwo’s Corporate Social Responsibility activities aimed at raising the standard in the educational sector in the country and at the same time sensitise the students by making them analytically minded so as to excel in their world by developing their ability to think through issues. The competition which opens from March 18th to June 7th, 2019 and has as it’s the topic “Justice as an Instrument of Enduring Peace in Nation Building”. According to a statement signed by Oluwayomi Uteh, group manager, Opera tions and made available to BusinessDay, the entry requirements for students to participant include: Essay of maximum of 2000 words, a Passport Photograph of the Student, Full Name, Address, Contact Telephone Number, class, school and Name and Telephone contact of the Principal. Essay could be submitted through email to essay@

gram must be directly related to the areas that prepare students to function in their community which are: Among the domains of community-based instruction are: domestic (daily living), vocational, recreation/ leisure, community and social. The domestic domain (self-management/home living/daily living) includes several areas, such as the following: Eating and food preparation, grooming and dressing, hygiene, health and safety, assisting and taking care of others The vocational domain covers the following areas: Classroom/school jobs, paid and non-paid work experiences within the community. The recreation/leisure domain includes the following types of activities: School and extracurricular activities, activities to do alone, activities to do with family and friends, physical fitness activities The community domain addresses many different areas that relate to the quality of life, including access to community resources, such as the

following: Travel, community safety, shopping (food, clothing, etc.), dining out (fast food and restaurants), community services (social security administration, medical, dental, legal services and libraries) The social domain covers team work, parallel play, turntaking and activities to share items. The benefits of implementing community-based instruction are enormous and when government agencies which service the citizens apply aggressive approach to address community-based instruction in our schools, our communities as well as our children will benefit with increased social, behavioural and self-esteem skills that will help develops work habits and enhance quality of life. Isaac Osae-Brown works for the Compton Unified School District in California as an Education Specialist and a beginning Teacher Mentor. He is an advocate and a speaker for Special Education services in the United States and abroad. www.facebook.com/ inclusivemindset

The evolving dynamics of discipline

Students test literary skills as 2019 Mike Okonkwo essay competition entries open trem.org or by post to The Redeemed Evangelical Mission (TREM) International Headquarters, Obanikoro/ Anthony Oke Bus Lagos. Uteh observes that National Essay Competition spans over a decade of developing and rewarding the writing skills of Nigerian youths towards national development. “The prizes for this year’s competition will be presented to the winners at the 20th Mike Okonkwo Annual Lecture, which has been scheduled for Thursday, September 5th, 2019 at the Muson Centre (Shell Hall) by 10.00 am prompt”, she said. Like previous years, the star winner school gets three set of desktop computers and a printer, while the student goes home with a trophy, Laptop, N100, 000.00 cash and a plaque. The first runner up school gets two set of desktop computers and a printer and the student goes home with a cash prize of N75, 000.00 with a plaque. The second runner up school gets a desktop computer, while the student gets N50, 000.00 cash prize and a plaque. Uteh further said that over the years the competition has been very successful in reshaping the thought pattern of the students to develop problem-solving skills.

The end results of special education are to foster independence and with that being said, all individuals with disabilities can develop their full potential through education and vocational training after school. A critical component of CBI is the involvement of parents and other members of the community such as business owners, teachers and local establishments. The expectation is that students with disabilities will live, work, shop and play in integrated, natural environments in the community with accommodations and supports. The first goal of CBI is to teach students to function as independently as possible in as many community environments as possible to enhance their quality of life. Through CBI, students learn skills that are identified both on the individual educational plan (IEP) and in the school curricula. The second goal is to provide students with expanded options regarding independent or supported living, employment and leisure time activities. The core of any CBI pro-

OYIN EGBEYEMI

s common as the statement, “Spare the rod and spoil the child” in Proverbs 13:24 is, it seems as though it is gradually losing its meaning through generations, both literally and figuratively. The behaviour that people exhibit is somewhat a reflection of their upbringing. So when we take a careful look around us, we would notice that there are behavioural traits specific to certain generations. Observing individuals from each generation, you would get a good understanding of why these traits are distinct. People in our society aged about 45 and above were brought up in very strict households. In fact, majority of their mothers were either teachers, other forms of educators or had day jobs with schedules, which allowed them to go back home at reasonable hours to face their children and households. Mothers then were very strict; some would even call them wicked due to their approach, which sometimes

involved physical disciplinary measures or other means which, today would be viewed as extreme, dramatic or even incriminating. Notwithstanding this, the products of this generation turned out okay. Majority of them became selfmade adults. However, when this generation started to breed their own offspring, they reflected on their parents’ ways and decided that they didn’t want to be as “wicked” and actually desired closer relationships with their children, which they did not enjoy from their parents. So the shouting and dramatic acts of discipline reduced a little bit. But some of these parents had to be smart to tailor their techniques to their children, as all children are different and some require a little more discipline than others. However, others did not quite get it right, and this is demonstrated through certain behaviours their children (age group of early 20s to late 30s - millenials) exhibit, which include a sense of entitlement, impatience, lack of respect and lack of independence, amongst others. With today’s generation, there seems to be a lack of clarity regarding this area of discipline. This matter is far more complex than it appears on the surface. With global consumerism trends, wealth becoming more of a materialistic venture than a dignified status, continued leniency in the approach of

disciplining children, limited amount of time parents get to spend with their children due to longer working hours and women spending more time at work, there seems to be a bit of an interesting shift in the approach to discipline both locally and globally. One argument is that because parents do not spend as much time with their children as they used to in the past, some of them rely on materialistic gratification, for example by buying them sweets or toys if they miss out on a school play or certain activities that their children are involved in, or just not being in the picture at all. Furthermore, parents may even feel so guilty for not spending enough time with their children that when these children misbehave, they give them a pass. However, this is really not what children need because the truth is that these solutions are only temporary, and are in no way the means of teaching children the difference between right and wrong. There is another argument, which stems from the materialistic movement in our society. Some of the things that are perceived as normal or “cool” in the current generation are actually not normal; some are very far from normal. It brings forward the question; why do parents now have a complex about what schools their children attend, whether

their children speak with a foreign accent (whilst attending school in Nigeria with Nigerian teachers), how many times in a year they travel abroad, how many countries they have travelled to and even what they do for their birthday parties (the good old living room and garden parties of the 80s and 90s no longer suffice). Parents need to realise that their moral values transcend directly to their children both consciously and subconsciously. There was a case in the United Kingdom that gave some insight into parents’ indiscipline in the school system. It spoke about a ruling by the Supreme Court to fine parents for taking their children out on holiday during term time. Since when did this even become an issue? The whole point of schools taking their time to prepare a calendar is so that parents can plan their schedules around it. Hence, there really is no excuse even for early vacation from or late resumption to schools, unless there are extenuating circumstances, which the parents ought to have discussed and arrived at an agreement with the school. This ruling came up as a result of a parent who took his daughter out of school for a 7-day trip to Disney World during term time. Oyin Egbeyemi is an executive administrator at The Foreshore School, Ikoyi, Lagos.

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Tuesday 19 March 2019

Markets + Finance ‘Providing proprietary research, commentary, analysis and financial news coverage unmatched in today’s market. Published weekly, Markets & Finance provides all the key intelligence you need.’

Flour Mills’ restructuring process to maximize shareholders’ wealth BALA AUGIE

Paul Gbededo, group managing director, Four Mills.

turing will allow the various businesses groups to focus and grow its market share and attract new capital and investors. The world over, mergers and restructuring of this nature has been identified as a potent tool for repositioning companies to achieve economies of scale. Experts are of the view that the restructuring will result in value in maximization for shareholders through a more effective and efficient utilization of resources. Of course merger of this sort along business operations underpins profit margin in the long run because the bigger unit will have the capacity to produce more while cost of production will drastically reduce. Flour Mills do not see the restructuring employees of the Group but it expects that there will be more opportunities for employment, as different roles will be created by virtue of an incorporated entity carrying on the fertilizer business of Flour Mills. “We expect Golden Fertilizer to incorporate its governance structure, its board of directors etc,

and recruit resources accordingly. The benefits and interests of the employ,” said the company. The new scheme will not have any financial effects on the balance sheet of Four Mills as shareholders’ fund will remain

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Other than the inherent benefits of improving synergies within the business functions and operational lines, the management of FMN believes that the restructuring will allow the various businesses groups to focus and grow its market share and attract new capital and investors

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t’s feasible to the deaf and audible to the blind that fast moving consumer goods firms are operating in a scotching operating environment, which is why companies that want to thrive amid the headwinds must embrace an aggressive business restructuring. Of course, dwindling purchasing power among consumers, insecurity in the northern part of the country, decrepit infrastructure, high incidence of smuggling, counterfeiting locally manufactured products, and the menacing grid lock at the Apapa Ports makes it practically difficult for companies to break even or magnify profit margins. Perhaps more worrisome is that Nigerians are getting poorer with no money in their pocket to buy goods while a high inflationary environment has damped the marginal propensity to consume. Flour Mills of Nigeria Plc (also referred to as FMN, or the FMN Group), the largest miller by market value, is poise to surmount these myriad of challenges as it plans to undertake a strategic restructuring process which will group its operations along its core business functions and value chains. Accordingly, FMN will now function from four major operational pillars namely, Foods, Agroallied, Sugar and Support Services, which by the way includes its transport and Logistics arm, Golden Transport company, Apapa Bulk Terminal and the popular bags and packaging brand Bagco. Going by the details contained in the Scheme of External Restructuring document made available to shareholders, it is expected that all agro-allied and related businesses will now be grouped under Golden Fertilizer Company Limited, a wholly owned subsidiary of Flour Mills of Nigeria Plc. This inherently implies that all assets and liabilities of Golden Fertilizer division which was until recently a part of FMN will now be transferred to Golden Fertilizer Company Ltd. Other than the inherent benefits of improving synergies within the business functions and operational lines, the management of FMN believes that the restruc-

at N153.27 billion albeit a total of N1.66 billion was transferred to Golden Fertilizer. “For a company that has been in operation in Nigeria since 1960, the potentials for further expansion and growth is not in doubt. The group constantly aims to expand its current operations both organically and through targeted acquisitions and/or joint ventures in line with its strategic objectives,” said Flour Mills. Volume Surges as leverage ratio improves Flour Mills just released its nine month ended December 2018 financial statement that showed the consumer goods giant recorded volume growth amid a tough and unpredictable macroeconomic environment. The company said that continued strong sales and brand building focus has ensured a further growth in market share and strengthened the Group’s market leader position within the flour market. Flour Mills has reduced the amount of debt in its capital structure as finance cost reduced by 34 percent to N16.12 billion in the third quarter to December (Q3) 2018 from N25.13 billion the previous year; the reduction in debt was largely driven by settlement of overdraft facilities and replacement of high yielding low with more favorable loans. Also, total debt- long and short term- stood at N127.41 billion in the period under review, representing a 39.58 percent reduction from N132.92 billion recorded the previous year. Debt to equity ratio, which means the level of debt in the capital structure, fell to 83.55 percent in Q3 (Dec) 2018 from 88.13 percent the previous year. The consumer goods firm has a coverage ratio of 1.64 times operating profit- though lower than the 1.76 times recorded in 2017-, which mean the company’s earnings can cover its interest expenses. The lower a company’s interest coverage ratio is, the more its debt expenses burden the company. When a company’s interest coverage ratio is 1.5 or lower, its ability to meet interest expenses may be questionable. 1.5 is generally considered to be a bare minimum acceptable ratio for a company

BD MARKETS + FINANCE Analysts: BALA AUGIE

and the tipping point below which lenders will likely refuse to lend the company more money, as the company’s risk for default may be perceived as too high. The results are largely a reflection of our focus on driving volume while improving on operational efficiency and ramping up strategic marketing and promotional activities to win over market segment in our food business,” according to Paul Gbededo, Group managing director of Four Mills. “Despite devastating effect of traffic congestion in Apapa on our operation, we are positive that we will see improvements across our major business segments before the close of the financial year, as we continue to focus on delivering on our promise of quality to our customers,” said Gbededo. Amid a myriad of challenges beleaguering consumer goods firms in Africa’s largest economy, Four Mills recorded a profit after tax of N7.89 billion while it posted revenue of N401.12 billion. Historical Background and Strategic Plans Flour Mills of Nigeria Plc was incorporated on 29 September 1960 as a private limited liability company and commenced operations in 1962 with an installed flour milling capacity of 500 metric tonnes per day. In 1978, Flour Mills was converted to a public limited liability company and its shares were subsequently listed on The Nigerian Stock Exchange. Today, Flour Mills is the largest flour milling company in Nigeria with an installed flour milling capacity of approximately 2.9 million metric tonnes per annum. Flour Mills continues to evolve from a food focused business to a food and agro-allied company. In 2012, Flour Mills commenced implementing its backward integration programs through its agro-allied business initiatives, primarily to support its core food business. The Company has continued to pursue strategic business opportunities, such as capacity expansion and realignment of its core food business whilst backwardly integrating in order to further mitigate reliance on imports and exposure to external volatility in the food business by increasing local content in a substantive and sustainable way.

Tuesday 19 March 2019

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Title Documentation

Land documentation processes in Nigeria: A mixed bag of experiences ... reform initiatives reducing time, procedures in Lagos ... but registration cost remains outrageous, unaffordable ENDURANCE OKAFOR

or Nigerians with enough money to throw around or those who have connection with persons in high offices, getting a title for their landed property can almost happen in a blink of an eye, while for others it can take almost forever. Checks by BusinessDay revealed that Nigerian property owners, estate developers, legal practitioners and other stakeholders in Lagos state have had different experiences, at one time or another, in getting their land documents in a country where 90 percent of houses are built with own savings. Issues around the rigorous processes,long duration and the high cost of obtaining land documentations are among key setbacks identified and highlighted by industry stakeholders. Jide Ogunleye, CEO of Denaro Properties Limited, a business and investment strategies firm with emphasis on real estate, said bureaucracy combined with corruption in the titling process will not allow things to get done. “Whatever has been done has still not solved the problem of titling, forget the ecertificate. The people that will provide the e-certificate can be bottlenecks in the process,” he said.

He explained that this is because “people won’t move your file, except they are paid or something, and as such it is likely that in some cases you can be on your land title for a very long period of time.” Omobola Ayoola, business development manager at Joe Etoniru & Associates, a real estate company, affirms, saying that the process of getting land title “is not cut-and-dried; it is not like you submit the form and immediately your form goes through some people and you get your certificate, no.” She notes that the cost of getting the document can be as high as N1 million to N2 million, adding that it has always been expensive. But, according to the Lagos State Business Made Easy (BME) document driven by the Presidential Enabling Business Environment Council (PEBEC), there has been a reform in the method of operations by the Lagos State Land Bureau as it has introduced the use of technology in its day-to-day transactions. The BME document, however, explains that prior to the implementation of the reforms, “applicants seeking to register property in Lagos were required to pay fees at different stages and carry out visits to the land registry before registration could be completed.” It notes that “the reform initiatives put in place have sim-

plified this process by making payments possible online, automating procedures and reducing charges.” As a result, the time required to register property has reduced from 105 days to 75 days, and also the number of procedures required to register property has reduced from 12 to 8. Adeniyi Akinlusi, president of Mortgage Bankers Association of Nigeria (MBAN) and CEO, Trustbond Mortgage points out, however, that the cost of land titling has reduced compared to what it

used to be before Bababunde Fashola’s administration. “So in terms of cost, it has come down. They have also tried to reduce the administrative bottleneck but there is room for improvement. However, I am aware that the new law being reviewed by Lagos state is going to streamline titling in terms of the processing,” Akinlusi said. Meanwhile, possession of land title documents is one of the most important ways of laying claim to ownership of a property.

Ayo Ibaru, COO/Director, Real Estate Advisory at Northcourt Real Estate, explained that the process of land documentation in Lagos state has attained an almost legendary status in property development lore. “There has been many a complaint about unnecessary hassles on the path to title perfection. The process takes too long. The requirements border on the onerous and the officials in charge could be more helpful,” Ibaru noted. But he added that there

have been some improvements, saying that transaction speed has gotten better as the government has made concerted efforts to introduce technology to the process, including the commissioning of an online system to facilitate the processing of land documentation. Narrating his frustration with the process of getting land title for his clients, a legal adviser who asked not be quoted for the fear of losing Continues on page 24

Co-work station

Work Hive opens opportunity for millennials to start business without office space cost CHUKA UROKO

n response to globalization and the dire need of technological-driven office space at reduced cost by Nigerian millennials, Work Hive Co-Work Space has opened in a serene Ikeja area of Lagos, Nigeria. The co-work space which

is a product of the corporate innovativeness of Nikoy Nigeria Limited is aimed to enable these millennials and start-ups begin their business without undertaking the burden of renting an office and providing all the needed facilities along with security. Nikoy Nigeria Limited is the parent company of Work Hive

Co-Work Space and, according to Olawale Oyedele, chairman of the parent company, the co-work space was intended to create a global working environment for these millennials who are the future drivers of Nigeria’s economy. Mojisola Oyedele, the managing director of the new company, affirmed that their

L-R, Wole Adeniyi, ED, Stanbic IBTC; Joseph Sanusi, former governor, Central Bank of Nigeria; Mojisola Oyedele, MD, Ace Wash N Dry Laundrumat; , Olawale Oyedele, chairman, Nikoy Nigeria Ltd; Olusegun Osunkeye, chairman, Osunkeye & Associates; former MD, Lasaco Assurance, and Olusola Ladipo-Ajayi, at the commissioning of Ace Wash N Dry Laundrumat and Work Hive Co-Work Space in Lagos recently.

target market were the millenials within the ages of 21 and 24, start-ups and young professionals. “The young professionals can come to Work Hive and rent a space for one hour or two; they can also go for daily or monthly rate. It all depends on the work. All the facilities which are obtainable in a conventional office are available here including internet facilities, power supply, and furniture”,she assured. According to her, Work Hive takes away all the burden and challenges associated with renting and managing an office space, assuring further that their services which are unique in that part of Lagos was affordable in all the rates they offer—hourly, daily, monthly and annual rates. Work Hive Co-Work Space was unveiled at the weekend along with a sister company, Ace Wash N Laundrumat which, in its basic form, is an advanced dry cleaning method that is in vogue in

the developed economies. It focuses on the imperative of modern-day technology which is the love of the millennial teeming population. Laundrumat which is a selfservice business of dry cleaning which can be done at the shortest possible space of time and at affordable cost is gradually emerging in Nigeria. The concept of is not new in developed economies but it is in Nigeria. “The difference between Laundrumat and the normal laundry services that people use is that it allows you to bring your clothes by yourself, do the washing and drying by yourself. All these services are supposed to be completed within one hour unlike the normal laundry services that take some days before clothes get back to the owner”, Oyedele explained. “This innovation is cheaper”, he said, adding that 25 pieces of clothes cost less than N2,000 for both washing and drying. “This is because we are using ad-

vanced technology and also applying the law of large number which means that the higher the number, the lower the price. Advanced technology gives less cost per unit. It takes an average of 25 minutes to wash your clothes and another 20 to 25 minutes to dry the clothes. So, everything is done under one hour”, he assured. Oyedele also informed that Laudromat provides a wide range of cleaning and drying all categories of clothes, including bed sheet, pillow cases, towel etc. Apart from self-service, there is drop-off laundry which is handled by a professional for just an extra token. The new dry cleaning method saves cost, reduces stress, turns around time and minimizes stockpile of dirty clothes. Olusegun Osunkeye, who chaired the event, commended the initiatives, and urged the government to create enabling environment for entrepreneurs through the provision necessary infrastructure.

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Why FMA, Adeniyi Cokers, A.T Onajide get more patronage for building designs ISRAEL ODUBOLA

of Finance in Abuja, South African Embassy, Sterling Bank Tower, St. Nicholas Hospital, Lagos, Keystone & Standard Chartered banks head offices are some of the edifices designed by FMA Architects. “These companies have been in the business for more than three decades and they understand the complexities of building and structural designs,” said Olumide Akinyemi, project manager at Josh Global Limited. The firms enjoy partnership with strong corporates like United Bank for Africa, Exxon Mobil, Telecom giant, MTN, Standard Chartered Bank, Chevron, Stanbic IBTC Bank, Zenith Bank, First Bank and Forte Oil among others.

Another competitive advantage they have lies in their collaboration with corporates in foreign countries. For instance, FMA has executed projects in Botswana and South Africa, collaborates with international firms in United States, United Kingdom and Canada, to mention a few, to implement complex projects. Also, ATO has the license to practice in United Kingdom and South Africa, and has completed projects in Ghana, Cameroun and four other countries in Africa. It is believed that large architectural companies like ACCL, ATO and FMA have competent workforce with high level of innovation to deliver world-class designs.

“Of course, large architectural companies are known to have specialists in various types of building designs, and this adds credibility to their services”, said Taiwo Oke, a Lagos-based architect. Oke added that because these firms ensured high professional standards in their practice was a big selling point for them. The overwhelming patronage for their services is an indication of clients’ confidence in their ability to deliver magnificent designs with high standards. “I am quite sure that they have the capacity to replicate beautiful designs in first world countries in Nigeria, and this makes them stand out for big projects”, he posited.

Land documentation processes... Continued from page 23 his job said in his last eight years of working on the field, nothing has changed about getting a land document. “The time it takes to get the document has not improved; it only just depends on how fast you want to get it done. It is for the highest bidder, sometimes if you have someone at the top, it can be faster but with serious follow up which would have involved you paying heavily to the officers you will be able to get it faster than others”. Over the past three years, Nigeria has implemented more than 140 reforms, increased its Distance-toFrontier (DTF) score by over 11 basis points, and moved up 24 places in the World

Tuesday 19 March 2019

Infrastructure Maintenance With TUNDE

Building Design

here are numerous architectural companies in Nigeria that specialize in building designs for industrial, commercial and public construction. But the services of FMA Architects, Adeniyi Coker Consultancy Limited (ACCL) & A.T. Onajide Architects Limited are in high demand. Unlike the construction industry that is dominated by the likes of Julius Berger and Cappa & D’Alberto, the structure of architectural industry in Nigeria is such that there are no conspicuous leaders. Architectural firms like ACCI, ATO and FMA have delivered diverse number of projects in the past, and poised to win more, and this begs the question of the factors behind the huge demand for their services. Experts are of the view that the huge demand for their services is attributable to major factorssuchasprofessionalcompetence, reputation, experience in big and cimplex projects as well as compliance with regulations and this has tangibly widened theirclientelebaseacrossprivate and public sectors. “People go after them because they have executed big projects in the past, and this gives clients confidence about their work”, Babatunde Abiodun, building supervisor at Planet Projects explained to BusinessDay. A common feature shared by these companies is their large portfolio of past projects of diverse building designs for corporate institutions and government. The companies have for long been involved in huge projects in Nigeria and Diaspora. For instance, Federal Ministry

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Bank Doing Business Index (DBI) rankings, as revealed by PEBEC Reforms Reference Handbook. Some of the highlights of reforms by successive administrations in lands bureau to date, as compiled from the website of the Lagos State Government Land Bureau include the 30-Day Governor’s Consent and Reduction of payments on Consent fees, Capital Gains Tax, Stamp Duty and Registration fees. Ibaru applauded these efforts qand the resultant improvements, but pointed out however that, in all, it still leaves much to be desired for a state that prides itself as ‘Centre of Excellence’. “The governor’s consent, by many accounts, can be obtained within 3 - 6 months

of completing the application. The cost, however, could be improved as officials still charge approved and not-soclear fees at different stages of the process,” he explained. The administration of the land use act means that everything must be issued by the governor, which according some real estate experts takes a lot of time. This means that when a mortgage is to be registered it must be with the consent of the governor, and this is cost-inclusive. The transaction cost of title perfection sometimes gets between 7 to 8 percent of a mortgage loan amount. A loan applicant sees a situation whereby he wants to borrow N10 million and he needs another N1 million or N700,000 as perfection cost,

explained Abiodun Akanbi, head of strategy at Infinity Trust Mortgage Bank Mary Ikechukwu disclosed that she had been processing her land title for over 2 years and still no sign of going through with it anytime soon. “At the first sight of presenting my file to the officers, they spotted some errors in the documents. Meanwhile, this is not my first time of registering, and so I had to start with the processing all over again,” she lamented. Continuing, she said, “even with the amount I have paid, the process is still slow and I do not even know the exact issue” adding, “there is need for an efficient online system that will help remove all the human interface in the processing.”

Ensuring adequate and proper signage in a built environment

ignage is one of the most crucial parts of a built environment and an important task of signage is way-finding. It refers to the manner in which visitors and occupants are directed through the facility to a desired destination. While way-finding is necessary in all facilities, it is particularly critical in facilities with high human traffic such as health care centers, institutions of learning, airports, and government buildings. Facilities managers can use various methods to ensure proper and adequate signage is in place to direct visitors and occupants. These may include maps and wall symbols. Three major types of way-finding signage are required; directional, conformational and informational. Directional signage tells people where to go and typically includes a directory identifying the floor and room number of a particular office or apartment. Once on that floor, additional signage indicates the direction a visitor must go to reach that location. Numbers or names posted outside of particular areas identify the location. In public buildings, directional signs to restrooms and fire exits are absolutely critical. The same goes for assembly points in the event of an emergency. Conformational signage is particularly important in larger facilities, such as airports and hospitals that often have long, complex systems of corridors and operations. Conformational signage tells people that they are headed in the right direction. Informational signage offers important information to building occupants and/or users. An airport or train station is a good example of how informational signage indicates where a particular flight or train is departing or arriving. When evaluating wayfinding signage requirements, facilities managers need to take the same approach used in evaluating site signage. They must put themselves in the position of a first time visitor or someone unfamiliar with the site. The following questions may be asked by facilities managers to assist them in determining what signage is required. 1. When entering the facility, is there clearly dis-

played information identifying the destination and the route to get there? 2. Once on that route, does signage periodically confirm a visitor is on the right route? 3. Are there enough signs to provide the information a visitor needs to complete the task that is the reason for the visit? Facilities managers also need to consider lighting requirements. Signage must always be in place once the building is occupied. Windows may produce glare that makes it difficult to see or read signs, and night conditions similarly may make it difficult to find and read signs. Backlighting critical signs or providing signspecific lighting may be required in these instances. Having the proper wayfinding signs is only the first step. Facilities managers also need to consider the materials used to make signs, balancing such factors as cost and appearance. In general, costs increase as the level of appearance increases. More expensive materials result in higher costs. One issue is frequently overlooked by facilities managers when changes take place in facility operations involves signage. Often times, facilities managers tend to assume that signage already in place is sufficient for way-finding and identification. In facilities that undergo significant changes in occupancy and/or operations, facilities managers may need to conduct a buildingwide sign audit. This audit may also be necessary in older facilities where sign requirements have received little or no attention. Considering the impact that inadequate signage can have on daily operations as well as during an emergency, the benefits far outweigh any costs. The person conducting that audit must be familiar not only with legal regulation requirements but also with the operations conducted in the facility. That may mean having to create a team consisting of in-house personnel and experts from outside. It must be noted that areas such as mechanical and electrical rooms, the location of fire protection equipment, room occupancy limits, and many other applications also require signage.

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How the ‘Reportgov’ app will help Nigeria achieve its ease of doing business goal …PEBEC moves to ensure Nigeria ranks top 100 by 2020 Jumoke Akiyode-Lawanson

igeria has retained an upward growth trajectory with regards to ease of doing business, as it moved up 24 places from its 169th position in the World Bank’s ‘Doing Business’ in 2017, to 145th in 2018. This is as a result of the many initiatives and reforms by the federal government; and to ensure that Nigeria keeps moving up the ladder to become top 100 by 2020 and ultimately be ranked in top 50 countries to do business by 2025, the Presidential Enabling Business Environment Council (PEBEC) recently launched the new REPORTGOV.NG App to ensure optimum operation of Ministries, Departments and Agencies (MDAs). The Reportgov.ng App, is an official public service feedback and complaints platform to support business climate reforms implemented by the Council since 2016. The platform, which is also a website, will facilitate the escalation and resolution of issues encountered with MDAs towards ensuring a more business-friendly environment. According to PEBEC app was launched to make it easier for individuals and corporates including Small and Medium size enterprises (SMEs) to report feedbacks and challenges encountered when dealing with MDAs of the Federal Government. The app which was developed by a team of 60 young Nigerian entrepreneurs; led by Soji Apampa, CEO, Convention on Business Integrity, was colaunched by Okey Enelamah; minister for industry, trade and investment, Adedotun Sulaiman; chairman, financial reporting council of Nigeria, and Jumoke Oduwole; senior special assistant to the president on industry, trade and investment, at the Regulatory Conversations (RC3.0) event themed “Improving Transparency and Ease of Doing Business in Nigeria”, which was hosted by The Convention on Business Integrity/The Integrity Organisation in collaboration with ActionAid, Nigerian Economic Summit Group, Lagos

L-R: Jumoke Oduwole; senior special assistant to the president on industry, trade and investment, Okechukwu Enelamah; minister of industry, trade and investment, Dotun Suleiman; chairman, financial reporting council of Nigeria, and Lolade Sasore; head, strategic communications and engagement, EBES at the launch of the REPORTGOV mobile app for ease of doing business, held in Lagos on Thursday, 14 March, 2019.

Chamber of Commerce & Industry and BusinessDay Newspapers, in partnership with the Enabling Business Environment Secretariat (EBES) of the Council. Speaking at the launch event in Lagos on Thursday March 14, 2019, Jumoke Oduwole, SSA to the president on industry, trade and investment said; “We first had it as a web based portal and we spent a lot of time with a lot of agencies and working with the back end because we all know that every application is only as strong as the back end. The minister took it to the federal executive council and president Mohammadu Buhari approved a 72-hour response time for the complaints and feedback lodged on the portal.” Now we have developed it into an app, so it is on Google play store and will shortly be available on Apple ios for download. We have also re-branded the web based portal,” Oduwole added. How the app works: The new app works as another innovative strategy of the Federal Government of Nigeria to deliver quick, pragmatic changes for Nigerians and foreigners

seeking to invest in Nigeria’s business community. It is believed that when you give feedback or file a complaint, you contribute to continuous improvement in service delivery and public protection efforts on a national level. Complaints can be made in four simple steps. After downloading the mobile app or visiting the web portal on www.reportgov.ng, users will be able to select from a long list of ministries, departments and agencies, click on ‘create complaint’ or ‘send feedback’, fill out the form and submit. Given the approved 72-hour response time, your complaint immediately goes to the Presidential Enabling Business Council (PEBEC), which then assigns the complaint to the MDA and follows up to ensure it is treated in line with the Service Level Agreement. Finally, the complainant will receive an email that the complaint has been resolved, or with information on the next steps required. So far, a high level of success across several areas has been recorded, and MDAs have made significant improvements. Many have taken up the challenge to deliver more transparent and efficient services to their customers in

alignment with the Executive Order 01 (EO1), with a number of notable milestones achieved such as an increase in the number of MDAs that have functional websites containing detailed information about their services or statutory functions, as well as improved collaboration among MDAs. The Executive Order E01, which was signed by Vice President Osinbajo on May 18, 2017, ensures that citizens have complete clarity on all government requirements and processes, better cooperation and improved information sharing among MDAs, as well as requiring proper communication of approval or rejection of applications to Nigerians within the stipulated timeframe. Okey Enelamah; minister for industry, trade and investment said the app was created to achieve the goals of government in terms of economic growth, creating employment, industrialization, diversification and others. According to him, “achieving its goals can only be achieved through engagement, energizing, empowering and enabling private sector businesses, SMEs and stakeholders in the economy.” “This is why every opportunity we

get to facilitate that process and to provide tools that you can use to enable ease of business must be viewed as important. This app is a very tangible attempt to create another avenue for engagement because communication is two-way. So, unless there is an app through which you can speak back to the government or to the agencies and service providers to say your experience, then it could be seen as more talk than action. As this app is launched, I hope we put it to use immediately,” the minister said. Adedotun Sulaiman, chairman, financial reporting council of Nigeria, said; “We love to complain a lot in Nigeria because in our country, not many things work. But in complaining, we complain to ourselves, and so changes are rarely made. But we now have a means of channeling our complaints to the right quarters and to those who can do something about it. There will be action because every complaint lodged on this app is tracked as to which ones have been resolved and which ones are yet to be attended to. Hopefully, things can only get better if we use this app appropriately.” When to use the Reportgov app Reports can be made on the app or web portal when information on any of the MDAs is not accessible or is incomplete on the advertised website, when applications filed are taking longer than the specified time, when payment for services are being delayed unfairly, if a civil servant or government official requests for money which is not in line with the disclosed sum for the service provided by the relevant MDA, and if any of your rights as an entrepreneur or business owner has been violated. When reports like these are made, criminal activities will be brought closer to justice. This will help deter others from violating people’s rights and will increase overall efficiency of the government and its parastatal, which will in turn help make business easier. PEBEC was established in July 2016 to remove delays and restrictions that come with doing business in Nigeria, and make the country an easier place to start and grow a business.

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Tuesday 19 March 2019

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Inlaks partners Moven Enterprise to provide personalised, innovative solutions to financial industry …Moves to enable predictive banking with AI, machine learning

Stories by JUMOKE AKIYODE-LAWANSON

nlaks, information technology systems integrator has partnered with Moven Enterprise, leading innovative mobile banking technology platform to provide personalised smart-banking technology solutions to the financial industry. The partnership, gives Inlaks turn key access into the financial Artificial Intelligence (AI) and Machine Learning (ML) market, provides the company the opportunity to establish a solid ground as a leading, innovative AI/ML financial solution provider in the global banking sector. Femi Adeoti, managing director, Africa operations at Inlaks, said, “According to the financial report 2019, one of the five innovation trends that will define banking in 2019 is the Artificial Intelligence (AI) predictive banking, which the Moven smart apps technology provides. The report also shows that AI predictive solutions will leverage customer data to provide enriched customer experience while increasing security and efficiency. As a forward-thinking organisation, we have partnered with Moven to ensure we cater to the needs of our customers across various segments.” Adeoti further highlighted the benefits of the solution to banks and financial institutions to in-

clude enhanced customer relationships, generation of new revenue streams, expansion of market reach, reduction in attrition rates, improving customer engagement, faster speed-tomarket among other benefits. Moven offers an innovative technology platform which includes a suite of easy-to-use APIs and a Software Development Kit (SDK), which global banks use to attract, retain and grow their customer base. This technology is proven to significantly reduce attrition, deepen customer relationships and help drive

new revenue streams for financial institutions. Moven provides users with contextual personalised advice as part of the e-wallet mobile app experience. Analysing the expenses daily, the service allows users to track their spending in real time while reducing spending and increasing savings—all to drive financial wellness and good financial habits. An automated tool for tracking spending and encouraging savings provides a way for banks to place themselves on the side of their customers. Brett King, founder and

executive chairman of Movencorp, Inc, said; “We are delighted that Inlaks is embracing Moven’s innovative AI-driven technologies to not only create personalised digital banking experiences for their customers, but also across the region.” Inlaks is a leading systems integrator in Sub-Saharan Africa. The company partners leading OEMs in the technology industry to provide world-class information technology solutions that exceed the needs of its customers. Over the years, Inlaks has built a reputation as

Airtel Nigeria unveils new number range, 0901

the foremost ICT and infrastructure solutions provider, helping customers effectively seize new market and service opportunities. With an impressive customer base that includes six Central Banks in West Africa, 18 of the 24 banks in Nigeria and other major customers in the West African region, Inlaks has become a dominant information technology company in Africa. Inlaks’ customers cut across various segments including banking, telecommunication, oil/gas, power, utilities and the distribution sectors of the economy.

irtel Nigeria has added a new number range, 0901, to accommodate more subscribers on its constantly expanding network. Aside the 0901 number range, Airtel currently has the following numbering series: 0802, 0808, 0708, 0812, 0701, 0902, and 0907. The telecommunications operator says the new 0901 number range, which brings its burgeoning numbering series scheme to eight, will offer more Nigerians an opportunity to experience seamless telephony/mobile Internet service on an innovative and affordable network with expansive 4G coverage. Commenting on the development, Dinesh Balsingh, chief commercial officer, Airtel Nigeria, said Airtel is positioned as the network of first choice for voice calls and mobile Internet and the introduction of a new number series is an affirmation that it enjoys the confidence and support of many telecoms consumers across the country. “Airtel is pleased to expand its number range to accommodate more telecoms consumers who desire exceptional telephony and mobile Internet experience as well as affordability and new innovation. “With the new 0901 number range, we are inviting more telecoms consumers to come experience the best and widest 4G and digital experience,” Balsingh said. Airtel Networks Limited is the third largest telecommunications services provider in Nigeria in terms of subscriber numbers Airtel’s parent company, Bharti Airtel Limited is a leading global telecommunications company with operations in 14 countries across Asia and Africa.

Smile expands retail footprint with Quickteller Paypoint agents nationwide

mile, a 4G LTE broadband telecommunications service provider, has collaborated with Interswitch Financial Inclusion Services Limited (IFIS)to make Smile ’s products and services easily accessible via Quickteller Paypoint agent locations spread across Nigeria. This unique collaboration provides ease and flexibility of payment for everyone to have access to the fast, quality, reliable and affordable internet and voice services from Smile, the network of choice. According Onamari

Horsfall, Smile’s general manager, sales and distribution, “Smile is happy to sign this collaboration to expand its retail footprint across Nigeria, which has a combination of making Smile’s products and services easily available and addressing customer’s travel time to purchase a device or airtime.” He added that the collaboration offers thousands of Smile’s customers’ another means of making purchases. Titilola Shogaolu, divisional chief executive officer of IFIS, said; “At Interswitch Financial Inclusion

Service, we are not only committed to reducing the financial exclusion gap, we are continuously working to provide convenient services and this latest collaboration is just one of the many ways through which we are achieving this.” This latest collaboration with IFIS further underscores Smile’s unending quest to best serve its customers. Smile launched the first 4G LTE network in West Africa in Nigeria in 2014 revolutionizing the way people access the internet. “Customers in Lagos, Abuja, Port Harcourt,

Ibadan, Benin City, Kaduna, Onitsha and Asaba, can experience the country’s most reliable, SuperFast 4G LTE mobile broadband services, and also enjoy SuperClear voice calls, video calls and SMSs from their one SmileData bundle,” the company said in a statement. Smile was the first to launch VoLTE on its network and has continued with its innovation, having introduced SmileVoice, which is a free mobile app that enables customers with any Android or Apple handset, including those which are not VoLTE-enabled, to make

supper clear voice calls over Smile’s 4G LTE networks. Interswitch Financial Inclusion Services Limited, trading as Quickteller Paypoint, has been positioned by Interswitch Group to serve as the interconnect point and infrastructure for integrating and delivering financial, non-financial, retail and social services to the unbanked, underbanked and banked. IFIS collaborates with financial service providers, merchants, billers and other organisations that aim to increase their efficiency and outreach through our

network of human service interfaces nationwide. The collaboration, which is expected to create over 18,000 Quickteller Paypoint agent locations across Nigeria, will position IFIS to work assiduously to remove the barriers to financial inclusion while creating wealth for its paramount stakeholder- the agent. Using simple innovative technology, persons can pay their bill, transfer money, receive money, buy airtime recharge and open a bank account at our Quickteller Paypoint agent location nationwide, Shogaolu said.

Tuesday 19 March 2019

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POWER

INVESTMENT

FG’s unwillingness to grant sovereign risk guarantee constrains new power projects ISAAC ANYAOGU

elivered ahead of schedule and on budget, the 450 MW Azura Edo IPP has emerged the gold standard for project execution in Nigeria, but this pattern may be impossible to replicate, given the Federal Government’s unwillingness to grant Sovereign Risk Guarantees to new projects. This was the one of the themes that emerged at the 19th edition of the Centre for Petroleum Information (CPI) Energy Finance Forum, an annual event, Chambers Oyibo, chairman of its board of governors said was set up to share knowledge on the energy sector and to network at very senior levels. A panel discussion on gas and power financing found that unless the Federal Government agrees to the same terms as it did under Azura, new projects would be difficult to reach financial close. Kayode Akinkugbe, MD/CEO of FBN Quest Merchant Bank said unless there is willingness to include take or pay provisions by NBET investors will look elsewhere. Dolapo Kukoyi, partner at Detail Commercial Solicitors said that after Azura the Federal government has not taken such huge commitments. “This is why the 14 solar PPAs have stalled, the kind of conform lenders were looking for, they didn’t get it and it might be difficult in this current environment.” said Kukoyi.

Promoters of the Azura IPP presented a watertight project complete with partial risk guarantee from the World Bank and backed the government to a corner. A default could cause reputational risk for Nigeria in the event the Federal Government decides to treat the contract in its usual cavalier manner. Odion Omonfoman, an energy consultant and the CEO of New Hampshire Capital Ltd had told Busi-

nessDay that Azura IPP, backed by a Partial Risk Guarantee (PRG) from the World Bank means that if the power generated is not paid for, Azura would be paid by the World Bank. This effectively becomes a World Bank loan to the Nigerian government. Thus Azura coming on stream potentially could increase Nigeria’s sovereign debt portfolio, in the event of a payment default by the Nigerian Bulk Electricity Trader (NBET) to Azura.

Since Azura, every investor now wants an SRG but a cash-strapped Federal Government forced to dip hands into the N701bn intervention funding meant to power generation companies to settle obligations to Azura, to the consternation of GenCos, has been unwilling to grant SRGs to new projects from solar power producers to gas fired plants. Worse still, the Nigerian Electricity Regulatory Commission (NERC), the

power sector regulator, which is weak and pliable to government control, has prevented DisCos from charging market rates for electricity supplied to consumers. This has contributed illiquidity in the sector and encouraged every investor to seek the Azura-styled commitments before coming into the sector. The debt financing for the $900m Azura power plant project is provided by a consortium of 15 banks from 9 different countries, including most of the European development finance institutions. “Part of the reason the Azura project was able to get funding and construction started was because the government committed to it and it has a very solid power purchase agreement based on the realities on ground”, Jubril Kareem, head of energy research at EcoBank had earlier told BusinessDay. “Nigeria is one of the most expensive places to generate power and if they are being paid according to the terms of the power purchase agreement, there is nothing wrong with that. Azura Power is the first Nigerian power project to benefit from both the World Bank’s “Partial Risk Guarantee” structure ($237 million of debt used to build the plant), the political risk insurance supplied by the Multilateral Investment Guarantee Agency, Azura delivered on budget and ahead of schedule by 7 months and could raise Nigeria’s peak generation from 5,155MW to over 5,500MW.

FUNDING

OML 40 reserves soars as Eland Oil & Gas secures new loan facility DIPO OLADEHINDE

land Oil & Gas, an Alternative Investment Market (AIM) listed oil and gas firm has recorded an 8 percent upgrade to the value of its reserves at OML 40 according to a report Netherland Sewell & Associates Following 2018’s oil production of 6.5 million barrels of oil, there have being around 8percent higher than previous estimates as the license holds proven reserves of 42.9 million barrels, based on the recent estimates, the report said. “By value, Eland’s entitlement soared by 68percent to $474 million due to a much higher oil price, a lower tax rate than expected for the next five years and the utilisation of startup losses at its joint venture Elcrest,” Netherland Sewell said in its report. OML 40’s 2P resources were valued at $569million while increase at 40 percent-owned Ubima field, also on the Niger Delta, were even more eye-catching albeit from a lower base. Proven or 1P reserves at Ubima

rose 634percent to 6.2million barrels, while 2P estimate rose 285percent to 9.3mln barrels, up 200 percent while 1P and 2P Reserves Replacement Ratios were 233 percent and 188 percent respectively. Concerning, oil reserves the term 1P is frequently used to denote proven reserves, 2P is the sum of proved and probable reserves while 3P is the sum of proved, probable and possible reserves. Also, Eland Oil & Gas announced that following a redetermination, the borrowing base amount has increased from $103 million to $134 million and an initial accordion increase of $50 million is being underwritten by The Standard Bank of South Africa Limited and Stanbic IBTC Bank PLC, resulting in the commitments under the facility increasing from $75 million to $125 million. Of the commitments, $50 milliony is currently drawn. “I am pleased to announce the large increase in borrowing base on our Reserve-Based Lending (RBL) facility which demonstrates the hugely

accretive quality of the new wells drilled on the OML 40 asset and the growth in value they bring to our shareholders,” Ron Bain, Chief Financial Officer at Eland Oil & Gas said on its website. The CFO said since refinancing the RBL in 2018 into a longer-term facility, Eland Oil & Gas now has the flexibility to diversify the capital structure of the company leveraging its position comfortably within its debt parameters and lowering the overall cost of capital.

Standard Advisory London Limited and Stanbic IBTC Capital Limited (as Bookrunners) have been mandated to manage the primary syndication of the initial accordion increase. Principal repayments will commence Q4 2019 (consistent with the statement in the November RNS that there is a one-year grace period on principal repayments from execution of the facility which occurred in November 2018). Through its joint venture company Elcrest, Eland’s core asset is a 45per-

cent interest in OML 40 which is in the Northwest Niger Delta and a 40 percent interest in the Ubima Field, onshore Niger Delta, in the northern part of Rivers State. The OML 40 license holds gross 2P reserves of 82.2 million barrels, gross 2C contingent resources of 50.7 million barrels and a best estimate of 252.1 million barrels of gross un-risked prospective resource while the Ubima field holds gross 2P reserves of 9.3 million barrels of oil and gross 2C resource estimates of 4.2 million barrels. In November 2018, Eland Oil & Gas announced it had successfully refinanced its existing reserve-based lending facility (the ‘RBL Facility’) with a new 5-year syndicated RBL facility in an amount of $75 million, with the option to increase it to up to $200m via an accordion, subject to incremental production and reserves. Over the years, Eland Oil & Gas operations are focused on production and development in West Africa, particularly the highly prolific Niger Delta region of Nigeria

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Tuesday 19 March 2019

ENERGY INTELLIGENCE Market

Changing global oil market leaves Nigeria with shrinking options STEPHEN ONYEKWELU

igeria’s crude oil is finding fewer buyers as the global oil market goes through deep changes with newcomers entering, exports increasing from former net oil importers and a global push for low carbon future. South Africa, a newcomer into the oil and gas market has made some significant gas discovery that can serve its six refineries for the next four years. This means it would import less from Nigeria. In the last three months of 2018, the value of crude oil imports by Africa’s most industrialised economy from Nigeria was N340 billion, according to Foreign Trade Statistics for the fourth quarter of 2018, published by the National Bureau of Statistics. Total Plc.’s major deep-water discovery offshore South Africa is creating a potential new wave of oil majors drilling in the area, hoping to find the next billion-barrel discovery. Some of Nigeria’s big crude oil customers are from Asia, but Africa’s biggest crude producer’s share of this market is shrinking because the United States of America as a matter of foreign policy plans to pump and export more crude oil to Asia. In the three months ending December, India imported crude oil worth N730 billion and Indonesia imported N248 billion

worth of crude oil, from Nigeria. “Greater US exports to global markets strengthen oil security around the world. Buyers of crude oil, particularly in Asia, where demand is growing fastest, have a wider choice of suppliers” Parisbased International Energy Agency said in a new report, ‘Oil 2019 – Analysis and Forecast to 2024’. This gives Asian buyers more operational and trading flexibility, reducing their reliance on traditional, long term supply contracts that Nigeria has been a beneficiary of. On 11 March, Mike Pompeo, the United States Secretary Of State met with top oil executives seeking to get them to help the administration’s effort to boost crude exports to Asia and to support its policy of isolating Iran, according to three people at two companies briefed on the agenda. “We are stuck until the Petroleum Industry Governance Bill is passed. Our reserves have been capped because there are no new investments. There are no new investments because investors do not see clarity” said Ronke Onadeko, an expert in Nigeria oil and gas sector business development. Nigeria’s oil reserve decreased to 36.247 billion in 2011 from 37.200 billion recorded in 2010, while in 2012 there was relative improvement to 37.139 billion but went down again to 37.071 billion in 2013. In 2014, it stood at 37.448 billion before sliding down

to 37.062 in 2015 while in 2016 it stood at 37.453 billion. Abayomi Fawehinmi an oil expert in a Lagos based oil firm said Nigeria’s inability to attract investment to its oil fields is obstructing growth and efficiency in the sector. “When last did we do oil bid rounds to sell acreages?” Fawehinmi asked on a phone interview with BusinessDay. Oil producing economies and international oil companies are also faced with the challenge posed by the global push to reduce net carbon footprints and transi-

tion towards a low carbon future. This again means less demand for fossil fuels in the medium and long term. To deal with this oil majors are investing in cleaner energy. In 2018, Shell invested $800 million in solar and wind as part of its new energy business. The British-Dutch oil and gas company has also acquired 310, 000 acres off the Coast of Massachussets and New Jersey with potential to generate 4.1 Gigawatts of electricity. BP Plc, a British multinational oil and gas company is investing in a solar development company

called Lightsource BP in which it owns 43 percent equity stake. Lightsource BP has doubled its global footprint over the past year, with presence in 10 countries now. It recently announced it would enter Brazil. “We have to move from being pure-play oil and gas companies into broader energy businesses. Our focus has to be on developing an energy system that is cleaner, better and kinder to the planet” Bob Dudley, BP CEO said at CERA Week, U.S.’ biggest oil and gas industry event, in Houston, Texas.

Company

French major Total contemplates Preowei design challenge DIPO OLADEHINDE

s investors and stakeholders in the Nigeria oil and gas sector awaits Final Investment Decision (FID) on relatively unknown Preowei field expected in early 2019, French major Total is considering running a design competition to select a subsea contractor for its deep-water project expected to produce around 70,000boepd (barrel of Oil equivalent per day) at peak. According to an Oslo-based media firm Upstream under Norges Handels og Sjøfartstidende AS or NHST Media Group, Total is “pushing a lot to do a design competition now” for Preowei field. Norwegian media firm intelligence report gathered that supposing Total opts for an integrated subsea solution, the likely interested parties in any design competition would be Texas based multinational McDermott-BHGE (Baker Hughes), Italian oil and gas industry contractor Saipem-Aker, Schlumberger company headquartered in Houston, Texas Subsea 7-OneSubsea and U.K based TechnipFMC While Local contractors will also need to be heavily involved to meet tough local content

requirements. Another source disclosed to Upstream intelligence that TechnipFMC could jump straight to the head of the contractor queue for an integrated subsea order because of the ready availability of about seven FMC trees “which are sitting on the beach” in Nigeria. “If you have the trees and load them with profit,” suggested this

market watcher, “you can almost give away the SURF for free, so the others cannot compete”. However, another Nigerian observer believes Total is unlikely to go down this route and will be keen to encourage competition “so that everybody is evaluated on the same basis”. “There has been no formal contact with the major contractors but a pre-qualification exercise could

begin in the coming months,” sources disclosed. A successful contractor on Preowei could potentially also supply an integrated subsea system for the Egina South project, located 20 kilometres from Egina. Development of Preowei was being considered in 2007 as the base case called for 30 development wells tied back to Egina, some 25 kilometres away.

The French major began to talk up the possibility of producing Preowei in December 2017 when, after drilling Preowei-3, it reported an addition of approximately 80 to 100 Million barrels of oil (MMbo) to the full field contingent recoverable resources, bringing them to 140 to 200MMbo. The Preowei-3 well, drilled to a final depth of 3,235 meters, encountered approximately 50 metres net of high-quality oil-bearing sandstone reservoirs, in line with expectations. The well confirmed previous results from the Preowei-1B and Preowei-2 wells, which encountered approximately 55 metres of oil-bearing sandstone reservoir. Recall, Total started up production on December 29, 2018 from the Egina field, located in around 1,600 meters of water depths, 150 kilometers off the coast of Nigeria. At plateau, the Egina field will produce 200,000 barrels of oil per day, which represents about 10 per cent of Nigeria’s production. Total E&P Niger ia L imite d (“TEPNG”), an affiliate of TOTAL has operated in the upstream sector of the Nigerian hydrocarbon industry for more than 50 years and has added over 3 billion barrels of oil equivalent to Nigeria’s production to date.

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Lagos heat wave drives uptick in inverter demand ISAAC ANYAOGU

he Nigerian Meteorological Agency (NiMet) predicts that in the coming days southern states will experience partly cloudy to cloudy conditions in the morning hours with day and night temperature of 31 to 36 and 21 to 25 degrees Celsius. According to NiMet, “Later in the day, haziness is expected over some inland cities with chances of scattered thunderstorms over places like Oshogbo, Akure, Abeokuta, Ijebu-Ode, Lagos, Umuahia, Owerri, Port-Harcourt, Eket and Calabar. Recently, Lagos has been hotter than usual and enquiries from inverter dealers show that Lagos residents are increasingly demanding for alternative power solutions including smaller generators, rechargeable fans, solar solutions and inverters. Inverter dealers report rising interest for smaller capacity inverters and alternative power solutions following rising heat waves in the state and poor supply from the Ikeja DisCo and Eko DisCos, two power distribution companies with Lagos as franchise areas. However, a key challenge is the cost as after examination of customers need, many cannot immediately fulfill the order. The temperature may have become hotter, but the finances have certainly remained cool. One dealer, Mercury Direct, provides customers with important points to note when making a decision to buy an inverter. Why you need an inverter Since power outages are common in Nigeria, a good inverter and battery can be priceless during such events. It can be very frustrating when you are watching your favourite program on TV or trying to sleep in a hot room at night. An inverter and battery could mitigate these challenges and with the added benefit of not polluting the environment with a generator. Making the right choice Since there are a hundreds of branded inverters and batteries in the Nigerian market, and using the wrong specification could lead to painful consequences, it is important to make the right choice. Mercury Direct says there are two main types of inverters available on the market. Modified Sine Wave and Pure Sine Wave. “If you wish to power small household

Inverter system installed in a house

appliances like lights, TVs and fans. Modified Sine Wave inverters are affordable and have high efficiency. They will provide you with power comparable (but not identical) to what you get from the power companies.” “If you would like to run larger appliances like a fridge, freezer, AC or medical equipment you should buy a Pure Sine Wave inverter. They are ideal for motor startups, make little or no noise and give power quality equivalent to what you get from the power companies, however, Pure Sine Wave inverter can cost twice as much as an equivalent Modified Sine Wave Inverter.” Size matters Another important factor to consider is size. “To choose the right inverter size for your needs, calculate the total wattage of all the electrical appliances you would like to run on the inverter. This can be achieved by checking the power rating label found on each appliance and adding up the total wattage. “You can find out the wattage of your appliances by checking the markings on them or by read-

ing the user manuals. If you wish to keep your total cost down, it is advisable to run only your essential appliances on the inverter,” the company said. Calculating your consumption, Source: Mercury Direct. “We recommend that you buy an inverter twice the size of your total energy requirements so that you have extra capacity and do not run the risk of overloading your inverter,” said Mercury Direct. Figuring out batteries Batteries serve the purpose of storing up energy from three main sources – Power plants, generator and renewable energy source, for example solar panels. The size and type of battery ensures optimal performance of the inverter system. Experts say the minimum required size of your battery bank will be determined by the voltage requirements of your inverter. A 12-volt inverter, for example, requires 12 volts and will work if you connect it to a single 12v battery. A 24-volt inverter will require 24 volts, which you can achieve by connecting two 12 volt batteries in series. The most common inverter battery capacities available in Nigeria are 12v 100AH and 200AH. A new customer can start with a small battery bank and add more LUMINOUS Specifications: 1.5KVA / 24V: Price: ₦ 65,000 Specifications: 1.5KVA / 24V : Price: ₦ 72,000 Specifications: 3.5KVA / 48V : Price: ₦ 190,000 Specifications: 5KVA / 96V : Price: ₦ 430,000 Specifications: 7.5KVA / 120V : Price: ₦ 530,00 Specifications: 10KVA / 180V : Price: ₦ 690,000 Specifications: 15KVA / 240V : Price: ₦ 1,050,000

batteries later on if your requirements change. However, one expert said it could limit affect performance as the batteries will lose capacity at different times. Options for customers include Dry Cell Deep Cycle Inverter Batteries and Tubular Wet Cell Deep

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Cycle batteries. Dry Cell Deep Cycle Inverter batteries are convenient for inverter system use because they require absolutely no maintenance. These types of batteries are perfect for home or-or small office applications where regular battery maintenance is not feasible. Unlike Wet Cell Deep Cycle batteries they can be left sitting around for long periods without use, with no detriment to performance. Tubular Wet Cell Deep Cycle batteries are equipped with sophisticated designs, which ensure excellent electrical efficiency and increased lifespan. They can often go on working for 10 years or

is in being sure of what you are really buying. You probably just have to trust the vendor, unless you have a deep knowledge of battery technology. The durability of your batteries amy also depend on you, as it is easy to get them damaged. A large dose of overcharge can quickly damage the battery. Dried up battery cells could spell the death of your battery. Being careful with your batteries could save you untimely replacement of batteries,” cautions an expert.

PRAG 1KVA / 12V – 69,500 Naira 1.2KVA / 12V – 76,600 Naira 1.45KVA / 24V – 83,100 Naira 1.5 KVA / 24V – 96,200 Naira 1.5 KVA /24V (Solar) – 123,400 Naira 3 KVA / 24V – 155,300 Naira 3 KVA / 24V (Pro Edition) – ₦487,000 3.5KVA / 48V – ₦197,700 4 KVA / 24V – 288,000 NGN 5 KVA / 96V – 319,700 NGN 6KVA / 48V (Pro Edition) – 838,500 NGN 7.5 KVA / 120V – 449,200 Naira 10 KVA / 180V – 503,700 Naira

more, however, they can be very expensive to maintain and should not be left sitting around for long periods of time without use. Like the muscles of the body, they need regular use to maintain optimal performance says Mercury Direct. Wet Cell batteries come with caps which you will have to remove every 3 to 6 months to add distilled water and they generate hydrogen gas while charging which needs to be well ventilated outside. “A big problem with batteries

PRICE GUIDE There are many brands of inverters in the Nigerian market but some of the most popular include Luminous, Sukam, Prag. A company like Arnergy have agreement with OEM to companies build Inverters and battery systems in their brand name. Some inverters are sold with battery and some, especially smaller capacity inverter are sold without batteries. Some are intelligent systems equipped with artificial intelligence technology. Below is a price guide of some of these popular brands. This merely serves as a guide and buyers have a responsibility to negotiate better terms.

SUKAM Su-Kam 800VA/12V pure sine wave N=49000.00 Su-Kam 1.5KVA/24V inverter =N=72000.00 Su-Kam 2.5KVA/48V inverter =N=170000.00 Sukam 3.5kva/48v Fusion Series inverter & commercial UPS N=199000.00 Su-Kam 5KVA/96V DSP sine wave inverter =N=415000.00 7.5KVA/120V Su-kam DSP Sine Wave inverter =N=525000.00 Su-Kam 10KVA/180V Colossal series inverter =N=750000.00 15kva/360V Su-Kam DSP Sine wave Colossal Series =N=1420000.00 High Capacity Su-Kam Online UPS, IntelliQ Series 15KVA, 20KVA & 25KVA DSP Online UPS - =N=825000.00 High Capacity Su-Kam Inverters, Su-Kam DSP Online UPS, IntelliQ Series 15KVA, 20KVA, 30KVA, 40KVA & 50KVA - =N=1495000.00

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email: isaac.anyaogu@businessdayonline.com, stephen.onyekwelu@businessdayonline.com, oladehinde.oladipo@businessdayonline.com

BUSINES DAY

Tuesday 19 March 2019

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BUSINESS DAY

Live @ The Exchanges Market Statistics as at Monday 18 March

Top Gainers/Losers as at Monday 18 March 2019 LOSERS

GAINERS Company

DANGFLOUR

Opening

Closing

Change

N10.2

N10.95

0.75

Company

ASI (Points)

Opening

Closing

Change

IKEJAHOTEL

N2.07

N1.87

-0.2

DEALS (Numbers)

N12.85

N12.95

0.1

CUTIX

N2.25

N2.05

-0.2

UBA

N7.45

N7.55

0.1

NEM

N2.5

N2.35

-0.15

VOLUME (Numbers)

CAVERTON

N2.17

N2.25

0.08

UBN

N6.85

-0.15

VALUE (N billion)

N21.9

-0.1

MARKET CAP (N Trn

N8.2

N8.25

0.05

ZENITHBANK

N22

FBNH

WAPCO

31,125.39 3,821.00 205,725,130.00 1.925 11.607

Global market indicators FTSE 100 Index 7,289.18GBP +60.90+0.84%

Nikkei 225 21,584.50JPY +133.65+0.62%

S&P 500 Index 2,824.50USD +2.02+0.07%

Deutsche Boerse AG German Stock Index DAX 11,641.24EUR -44.45-0.38%

Generic 1st ‘DM’ Future 25,847.00USD -52.00-0.20%

Shanghai Stock Exchange Composite Index 3,096.42CNY +74.67+2.47%

Stock market opens week on negative note Stories by Iheanyi Nwachukwu

he Nigerian stock market furthered its downward movement at the close of trading session on Monday March

18. At the sound of closing gong, only ten (10) stocks gained as against 20 losers. This led to the week opening on a negative note. The Nigerian Stock Exchange (NSE) All Share Index (ASI) decreased by 0.06percent, while the

Year-to-Date (ytd) return stood at -0.97percent. The All Share Index closed at 31,125.39 points as against the preceding day close of 31,142.72 points while Market Capitalisation closed at N11.607 trillion against preceding day close of

L–R: Abiodun Adeniran, executive director, Vetiva Securities; Patrick Ilodianya, managing director, SFS Capital; Jude Chiemeka, divisional head, Trading Business Division, The Nigerian Stock Exchange (NSE); Pai Gamde, chief human resource officer, NSE and Adewunmi Senbanyo, investment manager, AIICO Pensions during the Compliance Officers and Operations Officers workshop on Derivatives organised by the NSE.

N11.614 trillion. Cutix Plc led the loser league after its share price declined by 2kobo or 8.89percent, from N2.25 to N2.05 while that of Dangote Flour Mills Plc recorded the highest advance by 75kobo or 7.35percent, from N10.2 to N10.95. The volume of stocks traded decreased by 1.86percent, from 209.61million to 205.72million, while the total value of stock traded decreased by 42.16percent, from N3.32billion to N1.92billion in 3,821 dea ls. The Financial Services sector led the activity chart with 181.9million shares exchanged for N1.70billion; followed by Consumer Goods with 8.51million shares traded for N111million. Access Bank Plc, Zenith Bank Plc, UBA Plc, FCMB Group Plc, and GTBank Plc were actively traded stocks on the Nigerian Bourse.

Zenith gets shareholders’ approval to pay dividend

enith Bank Plc at its annual general meeting (AGM) held on Monday March 18, 2019 got the approved of its shareholders to pay final dividend. Zenith Bank had proposed final dividend pay-out of N2.50 per share, bringing the total dividend to N2.80 per share. “The bank remains a clear leader in the digital space with several firsts

in the deployment of innovative products, solutions and an assortment of alternative channels that ensure convenience, speed and safety of transactions for all,” said Jim Ovia, chairman Zenith Bank Plc. Ovia noted that the bank remains committed to delivering superior returns to “our muchvalued shareholders by ensuring that a good chunk of our profit is set

aside for you”. Zenith Bank announced an impressive result for the year ended December 31, 2018 with profit before tax (PBT) rising to N232 billion for the 12 months ended December 31, 2018, this represents an increase of 16.6 percent over the N199 billion recorded for the same period in 2017. The bank’s audited financial results for the 2018 financial year pre-

sented to shareholders, show its profit after tax (PAT) witnessed an impressive growth of 11 per cent year-on-year to N193 billion from N174 billion. At the AGM, the shareholders received and adopted the company’s financial statement for the year ended December 31, 2018 together with the reports of the directors, auditors and audit committee thereon.

Access Bank holds signing ceremony for N15bn Green Bond Issuance

ccess Bank Plc, a leading Nigerian multinational commercial bank - is pleased to announce the issuance of a 5-year Fixed Rate Senior Unsecured N15,000,000,000 Green Bond (‘’the Green Bond Issuance” or ‘’the Issue”); the first ever Climate Bonds Standard fully certified corporate Green Bond to be issued in Africa. The 5-year Fixed Rate Senior Unsecured Green Bond has been awarded an Aa- rating by Agusto & Co, the underlying framework verified by PwC (UK) and the Bonds certified by the Climate Bonds Initiative as having met the global Climate Bonds Standard. The offer for the Green Bonds was achieved by way of a Book Build which was fully subscribed. The Bonds priced at a coupon of 15.5%, with participation from a wide range of asset managers and pension fund administrators. The management of Access Bank had, in anticipation of the Issuance, launched the Nigerian Green Bond Market Development Programme in June 2018, in partnership

with FMDQ OTC Securities Exchange and the Securities & Exchange Commission. Access Bank supports the global climate change mitigation and adaptation agenda and seeks to promote responsible green lending globally. The Green Bond Issuance demonstrates the Bank’s commitment to sustainable operational practices and being a pioneer operator, both in domestic and international capital markets, Access Bank views the global drive for responsible and sustainable green financing as an opportunity to raise capital for the creation of assets through climate change financing. The Bank has a strong track record in deploying environmental and social risk management tools, partnering with local and international agencies to deliver a greener outcome from investing activities. Over the last five years, the Bank has pioneered various resource conservation programmes in water usage, energy consumption and waste recycling, aimed at reducing carbon emissions.

specialists and counselors. In addition, the financial institution has also scheduled a Family Fitness Day event in Lagos and its regional offices. This will bring together employees, their spouses and children who will engage in various fitness and fun-filled fitness activities, including aerobics, stress relief therapies and other games.

There will also be a healthy food cooking competition among staff of the Bank. Speaking on the significance of the Employee Health Week, Felicia Obozuwa, Divisional Head, Corporate Services of FCMB, said it is one of the key initiatives of the Bank carefully designed to promote its great place to work philosophy.

FCMB restates commitment to healthy living for employees

his year’s edition of the Employee Health Week of First City Monument Bank (FCMB) began on Monday, March 18, 2019 with an assurance by the bank that it would continue to encourage and execute programmes that will promote healthy living and work life balance of its employees.

The week long programme which runs till Friday March 22nd, is aimed at promoting the well-being and reducing the health risk factors of employees as well as their respective family members. The objective is to generate sustainability through several health and exciting activities that ultimately enhance

productivity. It focuses on good nutrition, exercise and early detection of diseases such as diabetes, hypertension and high cholesterol, among others. The highlights of this year’s FCMB Employee Health Week is free and comprehensive medical check-up for all employees of the Bank, free

mammograms for female employees to help detect early signs of cancer, counselling and tips on healthy eating and lifestyle especially the importance of eating more fruits and vegetables. These will be carried out in partnership with a team of highly experienced nutrition experts, health coaches’, medical

BUSINESS DAY

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Use business trips to expand your horizons

TIPS & TALKING POINTS

Capturing Innovation 70%: Forbes reported recently that about 70% of all digital transformation initiatives failed to reach their goals, which amounted to $900 billion out of the $1.3 trillion spent on such efforts going to waste. + Motivated to Win 40%: According to research, the feeling of motivation among employees is responsible for 40% of the success of team endeavors. + The Corporate Training Calculation $160 billion: The Association for Talent Development found that U.S. firms invest over $160 billion on employee training and career development resources. + Risk Assessment 13: Marriott’s current board of directors has 13 members, none of whom has a background in cybersecurity or high-level technology. + The Millennial Perspective 90%: A majority of millennial workers, almost 90%, value career growth and learning opportunities, according to a Gallup Poll.

oo many of us treat work travel like a curse, when it could (and maybe should) be one of the best parts of the job. Yes, being away from your family is hard, and yes, jet lag is a bummer. On the other hand, you’re going to a new city or a new country for free, so take advantage of it. Use the time between meetings to explore and seek out inspiration. Talk with locals, eat food you can’t get at home and stop into a museum — while trying not to check your phone. Squeezing in time for tour-

ism can be tough, but think of it as a way to practice spotting and seizing new learning opportunities. Even on a short business trip you can try something new, such as forgoing a hotel and finding a place to stay on an apartment-rental website. However you do it, find ways to get outside your comfort zone.

(Adapted from “How to Make Any Business Trip Less Boring,” by Stephan Spencer.)

too. Have everyone discuss team norms together so that there’s no confusion about what’s expected of people. And push veteran employees to ask for the new person’s opinion in meetings, to ensure everyone is being heard. There is a small window of time when newcomers can share valuable insights as an “outsider,” so take advantage of it.

(Adapted from “How to Make Sure a New Hire Feels Included From Day One,” by Sabina Nawaz.)

ow would your direct reports describe your behavior under pressure? Many bosses become emotional, controlling and closedminded — which can have a hugely negative impact on their team’s morale and productivity. To lead effectively when the pressure is on, think about the team dynamic you want to build over the long term. Then think about whether your stress-driven actions support that dynamic or undermine it. For example, in normal circumstances you wouldn’t try to motivate people with fear or threats, so don’t do it dur-

Expertise It’s in our DNA FirstBankofNigeria

ing stressful times, either. Talk to your team about why you’re under pressure and what you need from them, and thank them in advance for putting in extra effort. And normally you wouldn’t get angry or shut down in tense conversations, so don’t let stress keep you from listening to others and engaging thoughtfully. Once this period of stress is over, your team will remember how you led during it — so make sure their memories are positive.

(Adapted from “When Managers Break Down Under Pressure, So Do Their Teams,” by David Maxfield and Justin Hale.)

ow do you mentor someone with impostor syndrome? It’s hard to help employees who doubt their skills or accomplishments, but a few strategies can help. One is to normalize their feelings. When your mentee worries that he or she is a fraud, shrug your shoulders and warmly say, “You and everyone else in the building!” Remind the person that those types of feelings are pretty common — and people who don’t have them aren’t necessarily more competent. You can even share your own stories of feeling like an impostor. Another approach is to challenge nega-

In an ever changing economy, with 125 years of serving YOU, we remain strong, trustworthy, dependable, safe and consistent. You can be conﬁdent that we will continue to deliver innovative banking products and services which seamlessly and conveniently suit your lifestyle needs.

Visit www.ﬁrstbanknigeria.com to learn more about us.

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ifficult conversations are never fun, but preparing for them can help you ensure they’re productive. Start by identifying your motives. What do you want out of the conversation — for you, the other person and any stakeholders involved? Knowing your goals is a good way to keep the meeting on track if emotions rise. Next, gather facts to support your position. If you’re about to ask for a raise, for example, write down notes on how you’ve grown in your role. If you’re going to give someone tough feedback, bring examples of their work and behavior. Be ready to defend your point of view and explain how you came to it. And think through any stories you’re telling yourself about the other person. Do you see your boss as “the enemy” because she can grant or deny your raise request? Consider what your manager will care about in the conversation, and use that to plan how you’ll address her concerns.

(Adapted from “4 Things to Do Before a Tough Conversation,” by Joseph Grenny.)

Let your mentee know that feeling like an impostor is normal

Be the same boss in stressful times that You are in calm times

c 2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate

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Before a Tough conversation, prepare, prepare, prepare

To retain a new hire, make them feel welcome right away

Tuesday 19 March 2019

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Tips & Talking Points

Harvard Business Review

t’s exciting to welcome a new hire to the team, but how do you make the person want to stay? One way to reduce turnover is to help new employees feel welcome from day one. Don’t assume they’ll figure things out on their own — make time to talk about their goals, your priorities and how the company works. A weekly check-in is ideal, but if that’s not doable you can find other ways to catch up face-to-face. Even walking to meetings together can help build rapport. Your team can be helpful

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tive self-talk with concrete facts. If your mentee thinks he botched a presentation, for example, say, “I heard you did a great job. Do you actually mean there are a couple of things you want to work on for next time?” A third method is to remind him often that he does belong in his role. Look for opportunities to let these mentees know you believe in them and affirm their achievements.

(Adapted from “Mentoring Someone With Impostor Syndrome,” by W. Brad Johnson and David G. Smith.)

Tuesday 19 March 2019

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BUSINESS DAY

INTERVIEW

Solid Minerals

‘Everybody on the web should be a writer as well as a reader’

Lead poisoning: Artisanal mining and matters arising

BUSINESS

Tim Berners-Lee is the inventor of the World Wide Web. During his visit to Lagos Nigeria with the web foundation as part of a 30-hour tour to various cities to celebrate the 30th anniversary of the web; he spoke to BusinessDay’s Jumoke Akiyode-Lawanson about the impact of the web on economic and business development, security and education. Excerpts. How do you think third world nations can best harness the web for development, especially with relation to governance, for development of the economy and education? t’s really important that when it comes to where you live, you shouldn’t just sit there and look at what other people have done. I think you should use it to educate yourself and try to be creative in your own language. I think it is important that everybody on the web should be a writer as well as a reader. You should grow and prepare for the world.

What’s your impression about the Nigerian tech startup community and industry? My impression is that there is a huge amount of energy which in a way reminds me of the early days when tech-start-ups thought outside the box. That is the same way Nigerian tech start-ups are thinking of new ways to create businesses that would help people. The World Wide Web is responsible for turning the world we live into a global village, however, it has also raised opportunities for scammers, what solutions would you suggest for security issues around the web? Some of the things we should be talking about is that the dark web are simply criminals and it is very important that the authorities are strong and ready to battle. The cyber war against crime has always been an important thing. Do you agree that the World Wide Web and its contents are creating a new generation of youths with poor personal interactive and social skills which is creating new psychological and social conditions? That may be a popular theory but that is not what I subscribe to. I think it is much more complicated than that. I know there are problems with people becoming addicted to things online, however, there are also tales of people helping each other online and getting all the support they need from online communities. What do you foresee as the future of the internet, and are there prospects for the web to break further barriers and create new opportunities? I think it is very important that women everywhere feel that

Tim Berners-Lee

they are empowered and are able to use the web socially and for career development and growth. Women need to feel that they can make their voice heard, particularly on the web, and in general, the web should be for everyone. Humanity is a wonderful, diverse group of people. As humanity grows from 50 percent up to 80 percent, it is really important to capture the richness of all the world’s cultures and the richness of the different ways people think. When you invented the World Wide Web 30 years ago, did you anticipate the limitless opportunities inherent in the web which have given rise to multi-million dollar companies such as Google, Facebook, Amazon and others? I never dreamed that the web would be as big as it is now. However, the web is for everyone and not for a selected few, and that is why the Web Foundation is working to include the world by fighting for things like affordable and meaningful access to the web. How do you think Nigeria and Africa can apply the internet to bridge the knowledge gap? There are two parts to this. To a certain extent, when you come online, your natural instinct is to go and read the English Wikipedia to get background information about something. But then, that is just taking knowledge one way. You should also contribute to the English Wikipedia, but if your native language is not English, you should make sure that the Wikipedia has got all the information that you know about things around you, such as your towns, regions, sports,

clubs and others, so that it can be made available for other people to also learn about you and made available to people in your own language as well. Form communities or groups who speak your own native languages because I think it is very important that there should be a foundation for all the different cultures. What are the realities of cyber warfare at this time, what is the extent of damage it can cause, and how can it be controlled? The damage of cyber warfare is going to be very grave. The reality is that there would always be bad people around nations trying to take advantage of anybody who is weak and does not secure their cyberspace. So organisations, companies and government all need to have good defences unfortunately. They also need to protect the people by protecting social networks for example, from such attacks. What are your thoughts on the issues of cyber espionage and loss of personal data, as corporate organisations and countries continue to accuse each other of data breaches? To look after people’s data and make sure it is handled well, you need the government and companies to work together. So, the contract of the web is about companies, government and individuals all working together to make sure that the web is better, and it will require the attention and commitment of all of them. There is no simple solution because the government, companies and individuals all have their roles to play to achieve data security and web safety.

JOSEPH MAURICE OGU & FRANCISCA OLUYOLE

n many occasions, stakeholders have criticised the activities of artisanal gold miners with an observation that they process their gold ores within areas where citizens, especially children, are exposed to lead-laden dust. To prevent a repeat of these incidents, stakeholders have called for a long-term strategy for the industry, identifying and mapping possible areas of future outbreaks by engaging the local community to promote safer mining and environmental health. Speaking to BusinessDay, Dele Ayanleke, General Secretary, Miners Association of Nigeria, said all hands are on deck to make sure mining environment is safe for everyone so that such calamity that befell the nation as a result of using lead to extract gold will not happen again. There have been lots of training and sensitisations to make sure the miners are adequately informed of possible hazards and operational safely to everyone, he said. According to him, government, in collaboration with other agencies in Nigeria and around the world, is recommending alternative methods of extracting gold instead of using lead, which is poisonous. “The situation is under control. Government is exploring and recommending another means of extracting gold without lead,” he said. In one of such occasions, in 2010, lead poisoning occurred in Zamfara, which claimed lives of no fewer than 500 children of five years old and below. The incident occurred in three local government areas of Anka, Bukkuyum and Maru, comprising eight villages. Surveys conducted in the eight villages showed that no fewer than 17,000 people, mostly children less than five years of age, were affected by the poisoning. Public health officials in the areas recorded sudden high number of children that suffered from vomiting, abdominal pain, headaches and seizures — possible symptoms of lead poisoning. In May 2010, public health officials learnt that hundreds of children become sick in Zamfara; reports stated that the children suffered from vomiting, abdominal pain, headaches, and seizures. They also got reports that many children died but the cause was unknown and such a large number of childhood

deaths and illnesses became public health officials concern. A medical team of experts was sent by the Federal Government to one of the affected villages to find out the cause of children’s death. The experts observed that the lead poisoning outbreak in Zamfara in 2010 was attributed to the activities of artisanal gold miners that processed their gold ores at homes and village squares where children were exposed to lead-laden dust. Surveys conducted in the eight villages by the experts showed that more than 17,000 people, mostly children below five years were affected by lead poisoning. The team members were drawn from the Federal Ministry of Health, the Nigerian Field Epidemiology and Laboratory Training Program, the World Health Organisation, and Medecins Sans Frontieres (MSF) also known as Doctors Without Borders among others. The team discovered high level of lead inside most of the homes, wells and in the children’s blood. They noticed that artisanal miners would bring rocks inside their homes to extract gold which contained lead and when the gold is extracted, the lead dust spread throughout the house. The experts say lead is a naturally occurring toxic metal found in the earth’s crust; a cumulative toxicant that affects multiple body systems and is particularly harmful to young children. With this discovery, Medecins Sans Frontieres (MSF) began procedures to save the lives of lead-affected patients. It came up with effective

fected villages. In response to this, the affected eight villages were remediated by the United State Hazardous Waste Removal Protocols and the remediation lasted for more than four years in three phases. Huge amount of contaminated soils and mining waste were removed from 820 residences and ore processing areas in the villages. In spite of these efforts, lead poisoning recurred in Niger in 2015 where no fewer than 2,500 children in two villages — Unguwar Magiro and Unguwar Kawo in Rafi Local Government Area — were affected – resulting in the death of 30 of them. The Niger government said that in as much as it could not stop artisanal mining completely, it would make efforts to promote safer mining in the state. It said that it would train staff on laboratory analysis and management of lead poisoning, deploy more staff to health outpost and upgrade Kagara General Hospital to treat lead poisoning cases. The state government also said that it would cooperate with MSF, the United States Centre for Disease Control and Prevention, WHO, the Nigeria Centre for Disease Control, the Nigeria Field Epidemiology and Laboratory Training Programme, among others, to curtail lead poisoning recurrence. So, in 2018, the Ministry of Mines and Steel Development in collaboration with relevant agencies organised the second international conference on lead poisoning. The conference was organised to share lessons learnt from Zamfara and Niger and to

response to the crisis such as medical care therapy, health education, environmental remediation and safe mining practices. Further to this, in 2012, the Federal Ministry of Health, Ministry of Mines and Steel Development, MSF and other stakeholders organised the first International conference on lead poisoning in Abuja. The conference covered technical aspects of environmental remediation and case management in Zamfara. Stakeholders at the event pleaded with the government to release funds for environmental remediation of the af-

proffer ways of mitigating future lead poisoning outbreak. MSF, key international and national stakeholders, came together during the conference and called for a federal programme for the prevention of lead poisoning associated with artisanal gold mining in Nigeria. In a related development, Ayanleke expressed worry by the insurgent going to the mining sites to attack miners and mining communities. So, as the safety in respect to operational hazards is being addressed, safety in term of militancy/insurgency is equally being addressed.

34 BUSINESS DAY NEWS

C002D5556

Nigeria yields lower on surge in FPI... Continued from page 1

presidential elections. Prior tothe

elections,investorsadoptedawait-andsee approach due to the heightened uncertainty surrounding the Nigerian economy and financial markets. However, the election results signalled continuity in economic policies adopted by the incumbent party with respect to the current foreign exchange regime, and has instilled renewed investors’ confidence in the Nigerian markets. This trend was further corroborated by the significant increase in foreign portfolio inflows into the I&E FX Window, to $1.98

billion, a 262.64 percent increase when compared to the $546.00 million reported in the preceding week. The total value of trades for the week-ended March 8, 2019, came in at a hefty $2.67 billion bringing the year-to-date (YTD) value of trades at the window to $15.63 billion. “We believe foreign investors are now interested in Nigerian fixed income instruments with majority of the FPI dollar inflows directed at Nigerian money market instruments as well as sovereign bonds,” said analysts at CSL Stock Broker Limited. The bond market has also seen significant investors’ interest with all

auctions conducted in 2019 recording significant oversubscriptions. However, activities at equities market have been bearish as the year-to-date All Share Index (ASI) shed 0.90 percent despite stellar numbers by companies that have released full-year results. Analysts say the drop in yields isn’t surprising because the central bank had removed the one-year Open Market Operations (OMO) rates while there are ample demands for short-term papers. “Federal Government has been reducing its supply of Treasury Bills and that is why you see oversubscription,” said Wale Okunrinboye, head of research at Lagos-based fund manager, Sigma Pension Limited.

L-R: Abubakar Suleiman, managing director/chief executive officer, Sterling Bank; Njide Ndili, country director, PharmAccess Foundation, and Niyi Osamiluyi, founder/chief executive officer, Premier Medical Systems Nigeria Limited, at a press conference to flag off the Digital Health Summit in Lagos, yesterday.

Estimated billing: How a weak regulator... Continued from page 1

Electricity Regulatory Commission (NERC) was created to enable power distribution companies (DisCos) bill a customer when they are unable to gain access to such a customer’s premises. Now it is the only way DisCos want to bill anyone and the regulator barks when sanctions should suffice. Five years after power assets were handed over to core investors, estimated billing is now the most vexing issue in the Nigerian Electricity Supply Industry (NESI), representing 53 percent of all customer complaints in the last quarter of 2018, and leading the regulator to create a separate regulation to deal with the menace. According to the 2007 meter reading regulation, if a DisCo’s staff is denied access to a customer’s premises, the staff is empowered to estimate the customer’s usage for the period and read the meter at a later date or allow the customer provide the reading. It is illegal to bill a customer who has no meter and DisCos were prohibited from artificially inflating the estimated usage of a customer. In a flagrant abuse of this regulation, however, DisCos continue to inflict outrageous electricity bills on long-suffering Nigerian consumers and NERC, even though admitting that billing customers by guesswork amounts to corruption, has been unable to end the practice. “What obtains now is that a lot of new and existing customers are connected to electricity supply without a meter,” John Momoh, NERC’s chairman, said in the organisation’s January monthly newsletter published on its website.

“Customers whose meters become faulty are also not replaced. Both categories of customers are then charged monthly ‘Estimated Billings’,” Momoh said. Momoh further said there were many complaints that unmetered customers were issued estimated bills of monthly consumption with no clear scientific basis on how the billed amount was computed. “Where a customer is billed on guesswork, elements of corruption are introduced,” he said. NERC was forced to introduce what it called a scientific methodology to estimate consumption in instances where there are no meters, which basically involved requiring DisCos to measure electricity supply at distribution transformers so that consumption in a particular location can be ascertained. “The DisCos failed to do distribution transformer metering which the methodology was heavily dependent on for fairness, hence the source of inaccuracy in estimated billing,” Momoh said. Unable to compel the DisCos to fulfil the requirements of their contracts, largely because it had failed to allow market price for electricity consumed, thereby creating an illiquid market, NERC proposed a Meter Asset Provider Regulation, which allows thirdparty financiers to provide meter for a fee to consumers. As at December 2018, a total of 115 firms were granted ‘No Objections’ by the Commission to participate in the DisCos’ procurement process and were free to quote their cost of providing metering services. According to Momoh, the Com-

mission is currently reviewing the procurement process in the DisCos having appointed Tender Auditors to audit the DisCos and ensure that the MAPs appointed can deliver. The DisCos’ lacklustre response to the regulation could see its premature end. NERC has provided that customers handed crazy bills should pay the last bill they are comfortable with and then make a formal complaint to their DisCo to be resolved in 15 days. “Where this is not done or the customer is unsatisfied with the resolution by the DisCo, they may escalate the matter to the NERC Forum office. This is an independent avenue for the customer to seek redress,” Momoh said. When these fail, the Commission expects customers to complain to it. But these steps rarely resolve much in reality and are fraught with frustration. “I have written and complained more than a dozen times,” said Chris Akor, a customer whose bill rose from N4,000 to N38,000 even with deplorable power supply around Ajah area of Lagos under Eko DisCo management, where he resides. “The next step now is to institute a legal action.” Some customers of various DisCos told BusinessDay that their concerns were only resolved when they took the matter to court. DisCos, wary of legal pronouncements that could serve as precedent, like the 2015 judgment by a Lagos court barring NERC from raising tariff, have been forced to settle out of court, compelling parties to keep the settlement private. In one suit, a frivolous bill worth over N500,000 was cancelled, BusinessDay learnt.

“Over the next two quarters, yields are expected to remain subdued because the demand is still quite high,” said Okunrinboye. At the PMA, the CBN offered and sold N89.5bn worth of T-bills as against subscription of N604.1bn, representing oversubscription of 575.0 percent. Stop rates across all tenors offered declined from the last auction (91-day – 10.75 percent vs 10.90 percent; 182-day – 12.50 percent vs 13.00 percent; 364-day – 12.85 percent vs 14.37 percent). Ayodeji Ebo, managing director and CEO of Afrinvest Securities Limited, sees long-term rate going below 12 percent while yields could settle around 13 percent and 14 percent. “Relative to other emerging and frontier markets, Nigerian yields remains more attractive. Also, the assurances by the central bank that foreign exchange remains stable coupled with the ability of investors to hedge makes naira assets attractive,” said Ebo. A breakdown of issuance showed N150.0 billion in January against N197.10 billion in February. Marginal rate on the five-year, seven-year and 10-year offerings have declined 73bps, 70bps and 56bps, respectively, to 14.52 percent, 14.80 percent, and 14.94 percent. The allure of Nigerian money marketinstrumentandfixedincomeinstrument is because of the dovish United StatesReserve(USFed)oninterestrates which has seen yields on developed market instruments trend lower.

Tuesday 19 March 2019

Additionally, a benign political environment on the back of the successful conduct of the elections and a gradual economic recovery has boosted investor confidence in the Nigerian economy. For instance, Brent crude oil price has increased by 50 percent to $67.47 a barrel as at Monday, from an alltime low of $50.47 a barrel as at December 2018, thanks to an aggressive output cut by Organisation of Petroleum Exporting Countries members known as OPEC+, in order to regulate a market beset by supply glut caused by American shale oil producers. Nigerian GDP growth is picking up momentum as economy expanded by 2.38 percent in the last quarter of 2018 compared with 2.11 percent in the same quarter a year before, according to the latest data from the National Bureau of Statistics (NBS). There was a significant improvement in the country’s balance of payment as the total value of goods, services and capital exported over the period outweighed total imports with a surplus of $2.8 million, compared to the $4.5 billion deficit recorded in the preceding quarter. Compartmentalising the BOP data, the results indicated that the country’s current account balance improved from a deficit of $1.5 billion in the third quarter of 2018 to a surplus of $1.1 billion in the fourth quarter of 2018, largely attributable to an increase in exports, as well as a decrease in imports and net income payments.

Leading Rivers’ citizens seek judicial probe of election killings

group of seven leading citizens from Rivers State – including founder of StanbicIBTC Bank, Atedo Peterside, CEO of Access Bank, Herbert Wigwe, and a senior advocate of Nigeria, O. C. Okocha – is calling for a judicial commission to investigate the wanton killings that took place during the recent elections in the state. In a statement also signed by George Etomi, Emmanuel T. Georgewill, John Mbata and Tien George, the group said, “We are particularly concerned about the role played by the Nigerian Army in these events and welcome the announcement by the Army Command that they have set up a panel to investigate the conduct of their personnel who were deployed on election duties. “In the light of numerous disturbing video footages which have gone viral across the globe, it is important and imperative that the investigation is thorough, professional and unbiased. “Whilst we cannot and should not stop the Nigerian Army or indeed any professional body from reviewing the conduct of its own personnel, we hereby call for a Judicial Commission of Inquiry to be speedily set up by the Federal Government of Nigeria to secure a broader thorough, professional and unbiased inquiry into the massive loss of lives which occurred before, during and after the elections in Rivers State.” The statement issued Mon-

day said of the group, “We have watched with disbelief and horror recent violent incidents which occurred before, during and after the elections that were held in Rivers State on 23rd February, 2019 and 9th March, 2019. “These incidents occurred supposedly as a result of the elections. These violent incidents have led to the needless loss of so many lives, especially youths in various communities. We do not believe that elections which are designed to enable the people choose their leaders should lead to their death instead. Therefore, every single death must be investigated and the culprits brought to justice. “We are deeply troubled by the inability of the political leaders in our state to manage their rivalries and differences within acceptable norms of a civilised society as has been done in several other states in Nigeria.” According to the group, “Rivers State comprises many ethnic groups which have largely lived in harmony since its creation. Random killings are bad enough, but where patterns are discernible and some communities become angry because they hold others responsible for the needless loss of lives in their own immediate vicinity, the potential exists for a general and more troubling breakdown of law and order. “Our fear now is that, if not checked immediately, the escalating cycle of violence will drive away investors and investments thereby leaving our people impoverished.”

Tuesday 19 March 2019

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NDIC: Sanitizing the banking stable to protect depositors Bashir Ibrahim Hassan

Umaru Ibrahim, managing director/CEO, NDIC

was called in to assume all the liabilities of the extinct bank by way of injected funds worth N786 billion (representing Skye total negative assets value) to capitalize the new bank. Thus began the process of getting investors to buy off the new bank. The quantum of the infractions allegedly perpetuated by Mr. Ayeni and his friends is mind boggling. His recent arraignment before a Federal High Court was on a 10-count charge bordering on money laundering to the tune of N25,415,080,000 (Twenty Five Billion, Four Hundred and Fifteen Million, Eighty Thousand Naira). Ayeni was arraigned along with Timothy Ajani Oguntayo and two companies, Control Dredging Company Limited and Royaltex Paramount Ventures Limited, for allegedly conspiring at different times to fraudulently divert depositors’ funds domiciled at the bank for personal use. It was the third arraignment on different charges since the license of defunct Skye bank was revoked in 2018. The story of how Ayeni allegedly led Skye bank into bankruptcy is equally intriguing. Ayeni became board chairman of Skye bank in 2010. He remained the board chairman until 2017 when CBN eased out both the board and entire management. In 2013 his private company, Integrated Energy Distribution and Marketing Ltd (IEDM), led a successful bid to take control of the Ibadan and Yola Electricity Distribution Companies

(DisCos) after the privatisation of the assets of Nigeria’s state-owned energy firm, Power Holdings Company of Nigeria (PHCN), in 2013. The funds used to close these deals were later traced to Skye bank by the new management at Skye bank in 2017. The year 2013 was the point the journey into bankruptcy of extinct Skye bank started. The following reading of the banks audited financial statements filed at the Nigerian Stock Exchange (NSE) further revealed the extent of the rot. Between 2013 and 2015, as the bank was increasing its impairment on loans, there was a gradual decline in its post-tax earnings. The bank moved from a profit of N18.53

‘

NDIC is ever an important pillar of the financial safety net and plays a key role in contributing to the stability of the financial system and protection of depositors’ funds in Nigeria’s financial terrain

‘

he Nigeria’s government is forging ahead in its fight against economic and financial crimes. If anyone questioned commitment of the government to the fight against corruption, the arraignment of ex-Skye bank chair, Tunde Ayeni, and his fellow conspirators by Economic and Financial Crime Commission (EFCC) in a N25 billion alleged fraud recently should remove any doubt. When the news broke of the seriousness of the infractions in the way the extinct Skye Bank was run that led Central bank of Nigeria (CBN) to revoke its license last year, it became clear that unless all those responsible for bringing down the bank are brought to book, all the efforts of regulatory bodies like Nigeria Deposit Insurance Corporation (NDIC) will amount to waste of time and resources. The clear message from the deposit insurer is that it is resolute in sanitizing the banking sector, along side other regulatory agencies. At a joint conference between CBN and NDIC on that fateful Friday 21 September 2018, when the announcement of Skye Bank’s license was made, there was palpable discomfiture on the faces of the heads of the two regulatory bodies—Mr. Godwin Emefiele and Alhaji Umaru Ibrahim. The NDIC chief assured reporters then that they will not leave any stone unturned until they reach to the bottom of the saga. And that with the option of bridge bank they have brought to the table no depositor in the defunct Skye bank will lose his or her deposits. And those two assurances have come to pass. The trial of the people behind the mess has since begun in earnest, while defunct Skye bank depositors are going about their banking business without any hitch. The CBN had earlier in July 2017 intervened in the same bank when it noticed its liquidity issues by changing the management in an effort to allow the shareholders to recapitalize the bank on their own, save depositors fund and allow the bank to continue as a going concern. But one year down the line, it became apparent that the harm done was beyond the shareholders’ redeeming capabilities. Thus CBN had to use the hammer this time around. No sooner had the CBN revoked the license than the NDIC deployed its liquidation tool of choice—bridge bank—and Polaris bank was thus born. To ensure a healthy birth of the new bank, Asset Management Corporation of Nigeria (AMCON)

billion in 2013 to a loss of N40.73 billion in 2015. Also Skye Bank’s 2014 audited financial reports show that it continued to live on borrowed funds, the bank borrowed N116.09 billion in 2014 to repay another loan amount of N128.93 billion. However, in 2015 it could only repay N68.49 billion off its outstanding loan despite borrowing fresh loan of N158.12 billion. This precarious situation, which the management plunged the bank into forced it to continuously contrive the CBN’s regulations, making the fines it paid for non-compliance to increase from N300 million as at December 31, 2014, to a massive sum of N4.07 billion in the corresponding period in 2015. Increasing disregards for due diligence in the dispensation of facilities and general corporate governance in our banks is behind this messy affair. It heralds danger not only to the banking system but the economy in general. If bank manager’s greed goes unchecked then the integrity of the banks will be eroded in the minds of banking public. And that will spell disaster to our fledgling economy. The resort to the bridge bank option when it comes to mitigating banking crisis by NDIC needs to be put in perspective. Technically, a Bridge Bank refers to a temporary bank established to acquire the assets and assume the liabilities of a failed bank until a final resolution is accomplished. The concept, which was initially misunderstood here in Nigeria, could be said to have originated from the United State of America (USA) through the establishment of the first bridge bank in 1987 by the Federal Deposit Insurance Corporation (FDIC). It subsequently became popular amongst deposit insurance systems because of the numerous advantages associated with its implementation in resolving failure of distressed banks. Currently, countries such as Japan, Korea, Colombia, among several others, had at one time or the other used Bridge Bank in resolving the failure of banks and the experiences had been rewarding. The NDIC commenced the adoption of Bridge Bank as a failure resolution option in 2011. Three banks -- Afribank, Bank PHB and Spring bank-- among the banks that could not meet the recapitalization deadline of CBN then, were resolved using that option. Although the industry market share of the three banks in terms of their assets and deposits was less than 5% at the time of closure, the number of employees, branches and customers across the nation, gave them the status of significantly important banks. Hence, the adoption of outright liquidation

was considered undesirable. The bridge bank option has worked very well for Nigeria’s financial industry. As a result of it deposit funds have been saved, jobs preserve and shareholders fund secured. For example the bridge banks mentioned above 577 branches serving about 4.7 million customers, continued to function; all depositors continued to have access to a total deposit of N809.4 billion as against only N115.5 billion insured deposits guaranteed by the NDIC under a liquidation scenario; and safeguarded 6,667 jobs in the affected banks thereby enhancing confidence in the banking system. Globally, the use of deposit insurance and deposit protection is still undergoing important changes. For example, assumptions about the role of deposit protection in maintaining financial stability are still under scrutiny. Similarly, there is now a sort of paradigm shift. The main purpose of deposit insurance, as a part of the global financial stability framework, before the 2008/9 global financial crisis, was protection of the small depositor, who doesn’t understand and monitor the risk taken by the financial institutions. However, after the crisis, the task of maintaining and strengthening the stability of the financial system as a whole has become a priority. No wonder NDIC is keen at protecting the banking institutions from systemic collapse. The 2008/9 crisis resulted in greater convergence in practices across jurisdictions and an emerging consensus about appropriate features of the deposit insurance system. These include higher (and, in case of the EU, more harmonized) coverage levels; the elimination of coinsurance; the adoption of ex-ante funding by more jurisdictions; and the strengthening of information sharing and coordination with other safety net participants. The mandates of deposit insurers also evolved, with more of them assuming responsibilities beyond a pay-box function to include involvement in the resolution process. A role our own NDIC is visibly playing significantly and effectively in the last 10 years. NDIC is ever an important pillar of the financial safety net and plays a key role in contributing to the stability of the financial system and protection of depositors’ funds in Nigeria’s financial terrain. But it is a role that managers of our financial institutions must partake in, too – they must play the game by the rules lest they suffer the same fate as Mr. Ayeni of the defunct Skye Bank. Hassan, a financial analyst wrote from Abuja

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NEWS Scores injured as Lagos demolishes 17 distressed buildings JOSHUA BASSEY

cores of persons were feared injured following a reported case of partially collapsed building on Lagos Island, on Monday, as the Lagos State government is continuing the demolition of distressed and defective buildings in the state. So far, 17 of such buildings have been demolished since last Wednesday when a three-storey building collapsed on Massey Street, Lagos Island. Yesterday, four buildings were brought down as the exercise continues today. The buildings include those at 2, Olushi Street, by Swamp, 3 Obadina Street, 30A, Isale Agbede Street, and 36, Islale Agbde Street, all in Lagos Island. Officials of the state government, including Razak Musibau, director, Lagos State Fire Services, and Muyiwa Tiamiyu, general manager, Lagos State Emergency Management Agency (LASEMA), however, denied knowledge of a fresh building collapse on the Island Monday. Recall that a three-storey building on Massey Street, Ita-faaji, Lagos Island, collapsed on Wednesday, March 13, killing about 18 persons, including school pupils while several others

were critically injured. Both officials said the report of ‘another building collapse on Monday (yesterday) was not exactly true, as it had to do with a building that was being demolished by an enforcement team of the state government. Over 100 buildings identified to be in distress condition and structurally defective are being demolished in phases by the state government in what is aimed at averting accidental collapse and loss of lives. “All I can say is that officials of the Lagos State Building Control Agency (LASBCA) are continuing the demolition of distressed buildings earlier marked for demolition. I have called my own staff on the field and they said there was no fresh case of building collapse. “A few people got wounded as the demolition of the distressed building was going on and they have been taken to the hospital for treatment,” said Tiamiyu. Speaking also to BusinessDay, Musibau, the state director of fire service, dismissed any fresh case of building collapse saying, “I am not aware of another case of building collapse.” It was gathered that the injured were workers pulling iron rods and other reusable materials from the rubble

of the demolished building at 57, Egerton Square, Oke Arin, Lagos Island. Meanwhile, the Lagos State Building Control Agency (LASBCA) said about 13 distressed buildings have so far been demolished by the enforcement team as March 17, 2019. The agency said the exercising was ongoing one and would continue across the state until all identified distressed and defective buildings are taken down. Rotimi Ogunleye, the state commissioner for physical planning and urban development on Sunday, warned developers and owners of distressed buildings to demolish them or forfeit such properties to the government. He said his ministry identified 149 distressed and defective buildings in different parts of the state of which 40 had been demolished in the first phase while 38 were slated for the second phase prior to last week’s collapse on Massey Street. “In some instances where the owners and occupiers have been duly served with statutory notices and evacuated, people secretly returned to re-occupy the buildings despite the sealing of the structures by the Lagos State Building Control Agency,” he said.

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Travelex partners CBN, holds agenda-setting seminar for BDCs, March 26 SEYI JOHN SALAU

L-R: Stefan Traumann, consul general, Federal Republic of Germany, in a handshake with Cosmas Maduka, president, Coscharis Group, and Abiona Babarinde, general manager, marketing and corporate communications, Coscharis Group, when the consul general paid a courtesy visit to Coscharis Group head office in Lagos.

‘Healthcare should be accessible to indigent people’ MICHEAL ANI

ccess to health care should be at little or no cost to the less-privileged in Nigeria, Godman Akinlabi, chairman, board of trustees of Pistis Foundation, says. Akinlabi said this at a press conference on Ubomi - an upcoming weeklong free medical and surgical outreach targeting up to 4,000 people in Lagos. According to Akinlabi, “It takes parents that are healthy to keep children in schools. Therefore, health should be at little or no cost to indigent people.” The programme is organised by Pistis Foundation, a faith-based non-governmental organisation set up by The Elevation Church (TEC), to help the economically challenged through education (formal and informal), healthcare and shelter. The Foundation has partnered other organisations on the outreach, including Pro-

Health International, St. Kizito Hospital, Amethyst Hospital, Paediatric Care Clinic, and the Lagos State Ministry of Health. The Ministry has also screened the medical personnel involved and will provide ambulances for the exercise, Akinlabi said. Speaking on the rationale for embarking on Ubomi, Akinlabi, who is also the Lead Pastor TEC, said the organisation’s primary goal was empowerment through education. However, in an attempt to do that, they realised it could only be successful if the people are in the right condition of health. Access is still the greatest challenge to healthcare delivery in Africa. According to McKinsey, Africa suffers about one-quarter of the world’s burden of disease yet has barely three percent of its health workers. Conservative estimates suggest that four in ten people in sub-Saharan Africa have no access to medical facilities or personnel. Ubomi, which is the first

of its kind in the Lekki-Epe area, started March 18 - 22 at Pistis Annex, 3 Remi Olowude Street, by Marwa Bus Stop, Lekki, Lagos. According to the chief operating officer of TEC, Tunji Iyiola, over 200 healthcare professionals including doctors, nurses and pharmacists from across the country will be volunteering for the programme. “We expect that at least 300 procedures, including surgeries will be carried out,” Iyiola said. Ubomi is a Xhosa word, meaning “life”. According to the head of communications for TEC, Chinny Ugorji, “It is designed to cater to indigent people who cannot afford medical/surgical fees for their health conditions.” As such, Pistis Foundation will be attending to everyone who fits this profile, irrespective of religious or ethnic background, within the 4,000 person-limit, during the outreach. Attention will be given on a first-come basis, except in emergency cases.”

Black boxes show similarities between Ethiopia, Indonesia plane crashes … as Boeing finalises development on software update, pilot training revision IFEOMA OKEKE

ata retrieved from the black boxes of the Ethiopian Airlines crash that killed all 157 people on board last week show clear similarities with the crash of a Lion Air jet in Indonesia last October. Both crashes involved the same model of plane: the Boeing 737 Max 8. Dagmawit Moges, Ethiopian transport minister, who announced the findings on Sunday, said the government would release more detailed information within a month. France’s Bureau of En-

quiry and Analysis for Civil Aviation Safety (BEA) is working with US and Ethiopian investigators to determine what brought down the plane. The similarities involve an anti-stall system on both jets, designed to push the nose of the plane down if flight control systems sense a problem with low air speed. Both planes appeared to ascend and descend erratically, suggesting the pilots struggled to maintain control. However, this is just one aspect of what is expected to be a long and really lengthy investigation.

Dennis Muilenburg, Boeing chairman, president/CEO, issued a statement regarding the report from Moges, saying Boeing would continue to support the investigation, and was working with the authorities to evaluate new information as it becomes available, adding that safety was the company’s highest priority as it designed, built and supported its airplanes. “As part of our standard practice following any accident, we examine our aircraft design and operation, and when appropriate, institute product updates to further improve safety.”

n its continuing efforts to assist the CBN in strengthening the nation’s BDC sector, Travelex will hold its 2019 BDC seminar in Abuja on March 26. The timing of this year’s seminar is aimed at helping set an agenda for the BDC sector under the incoming administration. The place of Bureau De Change (BDC) industry in the economy of Nigeria cannot be overemphasised. For its important roles, whether in the past or now, government has always taken special interest in the activities of operators in the sub-sector. Determined to assist the operators make informed assessment of their activities in the foreign exchange market with a view to enhancing their performance going forward,

Travelex Nigeria Limited, in partnership with the Central Bank of Nigeria (CBN), has concluded arrangements for a one-day seminar for practitioners in the BDC industry. The event tagged, ‘The BDC Industry in Nigeria: Retrospect and Prospect,’ holds at the Transcorp Hilton Abuja. A statement by Anthony Enwereji, general manager, Travelex Nigeria, said the seminar would have in attendance Godwin Emefiele, governor, CBN, as the keynote speaker. Enwereji added that Aisha Ahmad, deputy governor, Financial Systems Stability Directorate, CBN, would speak on ‘Review of CBN Forex policies and guidelines on BDC operations (2015-2018)’, while Ayo Teriba, CEO, Economic Associates, would address the audience on ‘Analysis and proposals for strengthening Nigeria’s end-user forex policy’.

FG nears privatisation of Afam, Yola plants as Transcorp Power, others make final bids ONYINYE NWACHUKWU, Abuja

ureau of Public Enterprises (BPE) says it has received five bids for the privatisation of Yola Electricity Distribution Company (YEDC) and Afam Electricity Generation Company (Afam Power plc & Afam Three Fast Power Limited) by prospective core investors. The bids were received last Friday - the deadline for the submission of technical and financial proposals for the acquisition of the two firms. Two firms - Quest Electricity Nigeria Limited and Sandstream Nigeria - submitted proposals to acquire the Yola Disco while DiamondStripes Consortium, Unicorn Power Generation Consortium and Transcorp Power, sought to acquire the Afam Genco. Sandstream submission was however found to be non-responsive as it failed to include a bank guarantee in line with

the requirements in the Requests for Proposal (RfPs). Consequently, the representative of the firm took back the bid. Alex Okoh, directorgeneral, BPE, assured the bidders that the evaluation of their bids would be subjected to the highest level of integrity culminating into the financial bids opening of the successful bidders. Okoh said the Evaluation Committee would meet immediately to discuss and finalise the scoring criteria before commencing the evaluation process between March 18 and 21, 2109. The Yola Distribution Company was successfully privatised and handed over to the core investor in 2013, but a force majeure was declared in 2015 by the core investor citing insecurity in the North-East region of the country. Following this, the company was duly repossessed by the Federal Government. The transaction for Afam Genco on the other hand failed to scale through due

to delay in signing the Gas Supply Agreement (GSA) and the Gas Transportation Agreement (GTA). As a result, the National Council on Privatisation (NCP) gave approval for a fresh transaction to privatise the two power companies in 2017. 19 firms had indicated interest to acquire the two power plants at the close of the submission of bids for the Expression of Interest (EOIs) on September 26, 2018. But Okoh had told BusinessDay in 2017 that the sale of those two power plants would be concluded by mid 2018 for Afam Genco and later same year for Yola Distribution Company, but this did not happen. He had however, said the government would be a little bit more creative in terms of how it approaches the privatization and that the plan was actually to break the plant into smaller manageable business units, to make it attractive to prospective investors.

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RMB seeks partnership with FG to bridge housing gap Shareholders laud Transcorp for performance, GBEMI FAMINU

and Merchant Bank Nigeria (RMBN) has declared its readiness in partnering with the government of Nigeria in bridging housing gap in the country. Dalu Ajene, head of investment banking, RMBN, disclosed this in Lagos at the weekend on the sideline of the Indian Professional Forum (IPF) dinner Ajene said, “RMB as a bank is interested in partnering with and is looking forward to working with the government on bridging the housing gap in Nigeria.” Speaking on government policy that mandates financial institutions to contribute 10 percent of its profit before tax to the national housing fund, he said, “It is a very interesting way by the government to address the housing shortfall that exist in Nigeria, as long as it bridges the funding gap in terms of people being able to afford houses and also being able to get effec-

tive cost financing to acquire those houses.” He also mentioned that the bank had expanded its operations to India, adding that it was an important and value proposition for both countries considering the bilateral trade agreement between the two nations. Furthermore, he said RMB would leverage its business expansion abroad to foster success in the business environment by engaging significant businesses that have operations in Nigeria, and also interact with India either through trade, capital flows or partnership. He said, “Capital formation and business success is very key to grow value proposition for a bank like RMB.” Shri Abhay Thakur, Indian High Commissioner to Nigeria in his address, said India and Nigeria had developed and maintained a healthy relationship over the years. Despite the political developments ongoing in both countries, political leaders still met to discuss and agree on progressive options for the

countries, he said, as Nigeria was India’s largest trading partner and would continue to remain partners. Doyin Salami, CEO, Kainos Edge Consulting, asserted that 2019 had better prospects for Nigeria’s business environment than in 2018 because the uncertainties surrounding the country’s elections had been resolved. Salami, who was the keynote speaker at the IPF dinner, said, “Investments were not encouraging in 2018 due to the uncertainty surrounding the elections, but the successful conduct of the recent election has laid to rest investor’s fear of a change in government and change in policies.” Speaking on the Nigerian economy, he said the Nigerian economy was going through its recovery mode from recession, although at a snail pace, but the GDP in 2018 grew at 1.9 percent, which was an improvement from 2016 and 2017, when recession was experienced and the economy contracted.

approve 15k per share as dividend ENDURANCE OKAFOR

hareholders of Transcorp Hotels plc have extolled the company for its impressive financial results for the year ended December 31, 2018. The remarks were made at the company’s fifth annual general meeting that took place at the Congress Hall of the Transcorp Hilton, Abuja. Following the company’s 26 percent increase in turnover, the shareholders unanimously endorsed a final dividend of N1.14 billion for the 2018 financial year. The final dividend translated to 15kobo per ordinary share, which is a 20 percent improvement over the 12kobo per ordinary share for 2017. Speaking on the company’s growth, Emmanuel N. Nnorom, chairman, Board of Directors,

said, “Transcorp Hotels plc has exceeded the bar with an impressive turnover of N17.4 billion from N13.8 billion recorded in 2017, representing an improvement of 26 percent. This is an unprecedented achievement in the history of the company. It is a further demonstration of our ability to adapt quickly to a changing business environment while keeping pace with global best standards in hospitality.” The chairman also thanked the Shareholders for their continued support and faith in the Board and Management of the company. Commending the company for its overall performance, Patrick Ajudua, president, New Dimension Shareholders Association, said, Transcorp Hotels is an embodiment of what privatisation in Nigeria should be.” He said good Corporate Gov-

ernance and the presence of a focused management team concerned with giving returns to shareholders were some underlying factors behind the company’s continued success. Owen Omogiafo, managing director/CEO, reiterated the company’s commitment to quality and global standard customer experience, drawing on the varied international awards conferred on it. She said, “We are redefining the hospitality landscape in Africa and positioning our continent as a preferred destination for local and international tourists. Our numerous awards and recognition are proof of this.” On the prospects for 2019, Omogiafo noted, “Transcorp Hotels will continue to leverage on its unique value proposition and proven strategies to exceed 2018 performance.”

AXA Mansard promotes youth sports at 2019 World School Games SEGUN ADAMS

L-R: Eric Yankah, chairman, Africa Federation of Institute of Internal Auditors (AFIIA); Jenitha John, incoming senior vice chairman, Institute of Internal Auditors (IIA), Global 2019-2020; Uduak Nelson Udoh, chief audit executive, FirstBank/chairman, Institute of Internal Auditors, Nigeria Board, and Humphrey Okorie, CEO, Institute of Internal Auditors, Nigeria, at the ongoing Institute of Internal Auditors 2019 Global Council in Tokyo, Japan.

FIRS arraigns companies, 3 others over tax evasion, others MICHEAL ANI

he Federal Inland Revenue Service (FIRS) on Monday arraigned Fortless Global Concept Limited and Everyday Wine Shop and their representatives at the Federal High Court, Abuja, on alleged tax evasion, obstruction of official duty and attack on staff of the FIRS on duty, among other charges. In the Charge No: FHC/ ABJ/CR/48/2019, between the Federal Government of Nigeria (Complainant) and Fortless Global Concept Limited (also known as Fortless Supermarket and Stores and Chukwu Ejike (Defend-

ants), the FIRS preferred a six-count charge bordering on tax evasion and assault on FIRS staff on duty on the defendants pursuant to Section 174 (1) of the Constitution of the Federal Republic of Nigeria 1999 (As Amended) and Section 47 of the FIRS Establishment Act No: 13, 2007. Similarly, in the Charge No: FHC/ABJ/CR/47/2019, between the Federal Government of Nigeria (Complainant) and Everyday Wine Shop (also known as Everyday Wine Shop &Bar), Mbah Sunday and Epkeha Peter (Defendants), the FIRS preferred a six-count charge also bordering on tax evasion and assault on

FIRS staff on duty on the defendants pursuant to Section 174 (1) of the Constitution of the Federal Republic of Nigeria 1999 (As Amended) and Section 47 of the FIRS Establishment Act No: 13, 2007. Representatives of the two companies who are currently on administrative bail: Mbah Sunday and Epkeha Peter for Everyday Wine Shop and Chukwu Ejike for Fortless Global Concept pleaded not guilty to the charges. Justice Taiwo O. Taiwo of the Federal High Court 10, Abuja, granted the application of the leader of FIRS prosecution counsel, James Binang and scheduled

March 21, 2019 for the FIRS to prove the charges against the defendants. Following undertaking by the counsels of the defendants (Sanya Amos for Everyday Wine Shop and M. A Ejeh for Fortless Global Concept Limited) the court also granted that the counsels should to bring the defendants to Court on March 21, 2019 for further hearing. Binang said FIRS took the measures to prosecute the defendants to serve as a deterrent for other people who would want to evade taxes or tow the ignoble route of preventing tax officers from carrying out their official responsibilities.

XA Mansard, a member of AXA Group, a global leader in insurance and asset management, announces its commitment to promoting youth sports as well as healthy living and development among children by sponsoring CIS Lagos, to the World School Games 2019 held February 28 to March 2 in Dubai. The World School Games was a three-day international multi-sport competition staged in Dubai and attended by international schools from across the globe. A minimum of 16 students (8 boys and 8 girls) from each school took part in athletics, football and swimming in a bid to accrue the most points and be crowned

World Champions. The competition saw CIS Lagos, winning several gold medals among others in athletics and swimming. The aim of the games was to create a truly international event that brings together students from all over the world, breaks down social and cultural barriers, and celebrates the talent, diversity and sportsmanship of children from different countries, backgrounds and education systems. Speaking about the event, Kola Oni, group head, strategy and marketing at AXA Mansard Insurance plc, stated, “We are excited to be a part of this iconic event as we promote youth sports, healthy living and development among children through the sponsorship of CIS Lagos to the 2019 World School Games.”

Reforms: MADE, Novus Agro, others parade opportunities for farmers at Edo-FAC

etermined to exploit opportunities to deepen market development in the state, United Kingdom-funded Market Development in the Niger Delta (MADE) and Novus Agro have concluded plans to provide loans and extension services to farmers in the Edo Food and Agriculture Cluster (Edo-FAC), a training and aggregation facility set up by Governor Godwin Obaseki. The farmers have opportunities to access inputs and other services such as improved seedlings, herbicides, land preparation logistics and access to market.

This was disclosed at a community engagement workshop held at Uhi Community, in line with Governor Obaseki’s desire to alleviate the sufferings of farmers in the state. Speaking on the event, Ukinebo Dare, head of EdoJobs, said Edo-FAC had commenced visitation and community engagement with farmers in Uhunmwode Local Government Area of the state. During the meeting with the farmers in the community, the farmers were enlightened on the role government plays through Edo-FAC in ensuring they sell their farm produce after harvest.

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Tuesday 19 March 2019

Court sacks Delta APC chairman, others …Voids Ogboru’s participation in guber poll as it voided the emergence of candidates for the 2019 general election from the primaries conducted by Erue-led executive. I n s u i t n u m b e r FA / A S A / CS/76/2018, the plaintiffs had sought 13 reliefs among which is a declaration that the Ogodo-led executive committee is the authentic state executive of the party. Among other prayers sought by the plaintiffs, was a declaration that candidates that emerged from the primaries conducted by the Ogodoled executive are the authentic list of candidates for the 2019 general election. The court in the judgment granted all the reliefs sought by the plaintiffs. As a result, the re-election of Senator Ovie Omo-Agege has been affected by the judgment as he emerged from the primary con-

Francis Sadhere, Warri

he Federal High Court sitting in Asaba, the Delta State capital, on Monday sacked the state executive committee of the All Progressives Congress (APC) led by Jones Erue as chairman. The court, presided over by Justice T.B. Adegoke, held that Cyril Ogodo is the authentic chairman of the party in the state. The court also declared as void the participation of Great Ogboru as the governorship candidate of the party for the 2019 election. The court also held that the ward and local government executives of the APC under the Erue-led state executive is null and void. It further held that all actions purportedly taken be Erue as state chairman are also null and void, just

Great Ogboru

Inconclusive elections: Plateau, Bauchi raise security concerns Tony Ailemen, Abuja

he recent declaration of gubernatorial elections as inconclusive in some states by the Independent National Electoral Commission (INEC), has continued to produce ripple effects as Plateau and Bauchi State governors expressed fears over security implications of the pronouncement in their states. The Plateau State Governor, Simon Lalong, while speaking with State House Correspondents after meeting with President Muhammadu Buhari on Monday, attributed the killing of over 82 cows and rustling of another 30, as “politically motivated” to destroy his administration. “I always say it has political undertone. Why is it happening immediately after elections? It usually happens immediately before or after elections, why is it like that? It has some political connotation. “That is why I said I am concerned about security. Usually, it starts like that, they start rustling and killing cattle and the next thing you will hear is that, it is farmersherdsmen’ crisis,” Lalong said. The governor, who revealed that the state government was handling the issue, disclosed that he was at the Presidential Villa to brief President Buhari on the security situation

unfolding in his state. “I informed Mr. President that we are on top of the situation because we wouldn’t want that to escalate into farmers-herdsmen crisis. It is not farmersherdsmen crisis; it is criminals trying to foment trouble after losing elections,” he said. Lalong, who is seeking a reelection, said he was working hard to ensure a peaceful election, following the cancellation of election results in some polling units during the just concluded gubernatorial and State Assembly elections “So far so good, we have had very good peaceful elections. We are coming back for a supplementary election; I will like INEC to conduct a peaceful election and so we will like the security apparatus to be on ground in the state. That was my briefing to Mr. President,” he said. He expressed confidence that he would win the supplementary election, adding that he has no fears. “How can I be when all the votes that were cancelled were my votes? These were areas that I won. There was no need for cancellation but then as a lawyer, I still want to comply with the rules, I don’t want to be talking about infringing on the rules when the election result is very clear. “They said registered voters were 49,000 but the votes were not up to 20,000 but people were still saying we need 49,000 and I was already

on top with 45,000 votes. So, we are going to get the 49,000. How can you imagine that a sitting governor cannot get 3,000 votes out of 39,000 in an area that I have well-dominated for a very long time? “So for me, election is as good as concluded in Plateau State. I see it as an opportunity for people whose votes were cancelled for them to vote. People came and said their votes were cancelled; it is for them to go back and vote and ensure their vote counts this time around. “That is why I support that we go back and conduct the elections. If they (INEC) like, let them conduct the elections more than once; we will still win,” he said. Bauchi State Governor, Mohammed Abubakar who was also at the Presidential Villa, said he came to “brief” the President on issues surrounding the inconclusive elections. Recalling that the Returning Officer for Bauchi State at the end of collation, had rejected the result of Tafawa Balewa Local Government and then 36 other units spread around 15 local governments of Bauchi State and ordered a rerun, Abubakar described as “surprising” that INEC later reversed itself on the issues. “INEC came up with a procedure that is not known to law. Because, where a Returning Officer has declared the result, only an election petition tribunal can reverse the result.

ducted by Erue-led executive. Other candidates affected by the judgment include the state governorship candidate, Great Ogboru, the senatorial candidate for Delta South senatorial district and immediate past governor of the state, Emmanuel Uduaghan, among others. Prof Pat Utomi, Olorogun Otega Emerhor, Olorogun Ima Rume Niboro and others were upheld as the authentic candidates of the party in the just concluded elections. By interpretation, Olorogun Emerhor and Niboro are Senatorselect and House of Representativeselect, since the party won those seats. But counsel to the defendants, Okubor Nwachukwu said they would go to the court of appeal to challenge the judgment, expressing hope that the judgment would be upturned at the appellate court.

INEC was cowed to manipulate presidential election - ADP presidential candidate alleges Iniobong Iwok

abagi Sanni, the presidential candidate of the Action Democratic Party (ADP) in the just concluded presidential election has alleged that the Independent National Electoral Commission (INEC) was cowed by the threat of President Muhammadu Buhari to probe the commission after the general election by manipulating the presidential election in favour of the ruling All Progressives Congress (APC). INEC had declared incumbent President Buhari re-elected for second term with 15,191,847 votes, while Atiku Abubakar his closest rival and candidate of the People’s

Yabagi Sanni

Democratic Party (PDP) polled 11,262,978 votes. However, there have been wide criticism from opposition parties in Nigeria over the conduct of the February 26 election, the PDP candidate Atiku has gone to court to challenge the result of the election. But Sanni, who is also the national chairman of the ADP, in an interview with BusinessDay, Monday, noted that he congratulated President Buhari after the presidential election not because the election was free and fair, but because of the need for peace and unity in the country. Sanni faulted the result of the presidential election and its conduct, stressing that his party would not go to court to challenge the result because he does not have confidence in the election petition tribunal and the judiciary in the country to deliver justice. According to him, “All of us know that INEC was threatened when the president said he would probe them after the general election; the presidential election did not go well; there was manipulation, he who pays the piper detects the tune. “Yes, APC was declared winner but Nigeria as a country lost the election; the will of the people was not allowed to prevail, what was voted was not what was declared.”

Rivers guber: Coalition raises alarm over alleged plots to procure domestic, foreign observer groups to compromise INEC Innocent Odoh, Abuja

coalition of leaders of various community-based civil society groups in the South-South of Nigeria has raised the alarm over alleged plots by politicians in Rivers State to use the state’s resources to procure domestic and foreign observer groups to preempt the

Independent National Electoral Commission (INEC) in the Rivers State Governorship Election. The coalition raised the alarm in a statement issued on Saturday by Chima Womadi, its national coordinator; Akpofure Unuame, general secretar y, and Esther Longjohn, provost. “We wish to alert the relevant institutions and the general public of perfected plots by certain

known politicians in Rivers State using state-owned apparatuses to procure both foreign and domestic Observer groups to pre-empt the Independent National Electoral Commission (INEC) on its planned decision over the governorship election in Rivers State,” the statement said. The group also said that the alleged plot is aimed at manipulating and arm-twisting the Commission

to compromise even as it urged the commission not to succumb to any form of pressure. “We wish to state that a free, fair and credible election is fundamental. Hence, INEC should be bold and not sell out because of the desperation of these known political figures who seek to serve their own ends at the detriment of the state. “Hence, we caution that INEC

must be cautious in taking final decision on Rivers governorship elections. It must run away from any plan to smear its image and cast doubt on the minds of the voting public knowing that stakeholders are watching,” it further said. Rivers State Governorship election was suspended by INEC following violence and irregularities that marred the polls on March 9, 2019.

Tuesday 19 March 2019

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What will it take to push May’s Brexit deal over the line?

PM needs to win over not just the DUP and Tory rebels, but also the House speaker HENRY MANCE

t is likely to be another frenetic week in the Brexit process. Last week MPs rejected prime minister Theresa May’s Brexit deal for a second time, and also voted to delay the UK’s departure from the EU beyond March 29 in order to avoid a no-deal Brexit. The prime minister is expected to try to win parliamentary support for her Brexit deal at least one more time before going to the EU council on Thursday to ask for an extension to Article 50, the formal exit process. Tuesday is seen as the most likely day for MPs to vote. The question is how Mrs May can turn a 149-vote loss last Tuesday into a victory, and thereby salvage her premiership. How will May approach the third meaningful vote? There will be no more concessions from Brussels. However, some of the Eurosceptic Tories who voted against the agreement may accept that it is the hardest form of Brexit they can now expect, after MPs voted last week to reject leaving the bloc without a deal. In addition, Mrs May is hoping to spook some Brexiters with the threat of a Brexit delay to beyond June, and possibly holding European elections in May, if they do not accept her deal. Gavin Robinson, the Democratic Unionist party MP, described holding European elections as “disastrous”. But the DUP’s main sticking point is the backstop, the controversial insurance mechanism to avoid a hard border on the island of Ireland, which the attorney-general Geof-

frey Cox has advised could endure “indefinitely”. Mr Cox will not issue new legal advice, but he is expected to flesh out on some of the more reassuring parts of last week’s opinion. On Monday, Lord Trimble and Lord Bew, who played a role in securing the Good Friday Agreement that ended the conflict in Northern Ireland, said in a research paper for the Policy Exchange think-tank that they believed the government could use an article in the Vienna Convention on international treaties to exit the backstop, if it had a “socially destabilising effect” on the 1998 peace deal. Can May still find a majority for her deal? To overturn her 149-vote deficit, she would have to win over at least 75 MPs. The most plausible route starts with the DUP’s 10 MPs. If they backed her deal, then some 50 of the nearly 70 Tory Eurosceptics who voted against it last week may change sides. Then Mrs May would need a further 15 Labour MPs, in addition to the five Labour and former Labour MPs who backed her last week. Even if she fails in the third meaningful vote, Mrs May could still try to bring back her deal a fourth time — perhaps even on Wednesday — ahead of the EU summit. That would be a desperate last effort to avoid MPs seizing control of the process the following week through indicative votes on options such as a soft Brexit. However, any plan to bring the deal back to parliament would have to reckon with the House of

Tech investors include #MeToo clauses in start-up deals Entrepreneurs forced to disclose sexual harassment complaints in due diligence exercises ALIYA RAM

ech investors are increasingly including “#MeToo” clauses in deals with start-ups, forcing entrepreneurs to disclose complaints about sexual harassment in the workplace, as more women speak out about sexism in the industry. Lawyers and deal advisers said such clauses were being used in contracts, due diligence exercises and codes of conduct on both sides of the Atlantic, following highprofile allegations of harassment and discrimination at major tech companies including Google and Uber. One investor, who declined to be named, said similar clauses had also been used by asset owners that back venture firms, such as pension funds and family offices, after sexual misconduct allegations at US companies including 500 Startups, Binary Capital and Draper Fisher Jurvetson, and Israel’s Pitango Venture Capital. The wording, used in the “reps and warranties” that are part of dealmaking agreements, typically states: “There are no allegations, complaints or claims of sexual harassment made against any directors, officers or employees of the [company] and, so far as the [warrantors/sellers] are aware, there are no facts or circumstances likely

to give rise to any such allegations, complaints or claims.” Shing Lo, venture capital lawyer at Bird & Bird, the international law firm, said the clause was recently used by a British company developing “internet of things” technology when it invested in a UK start-up, as well as a European venture fund that invested in a retail and consumer start-up. Victor Basta, founder of Magister Advisors, a boutique investment bank, said a recent deal involving a large US acquirer of payment processing technology required a specific screening of employees for cases of harassment or improper conduct as part of its due diligence. Carson Burnham, co-chair of the mergers and acquisitions practice at Ogletree Deakins, the labour and employment law firm, said many firms disliked the clauses. “People are still grappling with the extent to which the issue itself is material and frankly, you know that many of the people involved in these transactions and corporate development are men,” she said. “But certainly for the more progressive firms, we are seeing that this is being included.” The Guardian Media Group’s venture capital fund has drafted a pledge about diversity and harassment for founders to sign, but declined to specify details, saying it had not been finalised.

Commons speaker John Bercow, who has a record of defying the government. Under a parliamentary convention, MPs cannot normally be asked to vote on the substantially same matter twice in the same parliamentary session. Unless Mrs May can point to substantive changes, Mr Bercow could block a third or fourth meaningful vote. Will the EU agree to an extension to Article 50? Yes, but for how long and with what conditions is unclear. Any extension has to be agreed unanimously with all 27 member states. If Mrs May’s deal passes the Commons by Wednesday, she will ask to delay Brexit from March 29 to June 30 to pass the necessary legislation.

That would be relatively straightforward for the EU to agree to. But if her deal hasn’t passed, EU countries will want more clarity about her plans to build a consensus — and may propose a longer extension than Mrs May wants. The Netherlands is minded to support only a shorter extension, while Germany’s Angela Merkel and France’s Emmanuel Macron see advantages in a longer delay. Any extension would have to be approved by both the Commons and the House of Lords. Will May offer to resign to win over MPs? Mrs May’s political demise has been much predicted, including after the June 2017 election, in the wake of her disastrous October 2017

party conference speech and at numerous moments since. She has survived because Tory MPs cannot agree an alternative leader. After surviving a confidence vote three months ago, Mrs May cannot formally be challenged as Conservative leader until December. Some Tory MPs say that her deal would stand more of a chance if she promised to resign immediately after Brexit and leave the next phase of negotiations to someone else. It would be a high-risk gambit for the prime minister, whose authority would seep away further once she set her departure date. But if the parliamentary maths is nearly on her side, a promise to quit could win her the final few MPs she needs.

Payments group Worldpay to be taken over in $43bn deal Financial services technology group FIS seeks scale with acquisition NICHOLAS MEGAW, ARASH MASSOUDI AND SARAH PROVAN

IS, a US-based financial services technology company, has unveiled plans to buy Worldpay in a $43bn deal that would create one of the largest providers of the plumbing and infrastructure that powers banks and payments. The latest deal in a wave in the payments industry marks the second time the Worldpay business, which was spun out of Britain’s Royal Bank of Scotland as a condition of its bailout during the financial crisis, has been acquired. Worldpay became the UK’s largest payments firm before it was taken over by US-based Vantiv in a $10.4bn deal last year, after which the US company took its name. Worldpay shareholders will receive 0.9287 FIS shares and $11 in cash under the terms of the offer. The bid values Worldpay’s shares at roughly $112, a premium of just over 13 per cent from its close last week. In pre-market trading on Wednesday morning Worldpay

shares were up 11 per cent at $109.60. The combination values Worldpay at about $43bn, which includes the payment group’s net debt of $7.7bn. FIS shareholders will own about 53 per cent, while Worldpay holders will own the remainder. The combined group would have generated revenues of $12.3bn and adjusted earnings before profit, tax, interest, depreciation and amortisation of $4.9bn in 2018. “Scale matters in our rapidly changing industry,” said FIS’s Gary Norcross, who will remain chairman of the board of directors, president and chief executive. FIS said it will look to reap $700m of ebitda synergies from cost cutting and cross-selling over the next three years. The deal will see Jacksonvillebased FIS retain its headquarters and get to name seven directors to a 12 member board, while Worldpay will get the other five. Worldpay boss Charles Drucker will become executive vice-chairman. FIS develops technology ranging from the core banking plat-

forms that power retail lenders’ systems to software for asset managers. The company has grown through more than a dozen acquisitions in the last 15 years. Worldpay specialises in services that enable merchants to take digital payments. Worldpay processes some 40bn transactions annually in 146 countries and 126 currencies. The New York and London listed group is based in Ohio after the Vantiv deal, though it retains an international base in the UK. FIS made no mention of the UK base in its announcement. Changing consumer habits have driven rapid growth in the payments sector in recent years, a trend which has encouraged a wave of merger and acquisition activity. Most recently, US payments processor Fiserv agreed to purchase rival First Data in a $39bn deal. Several private equity-backed companies are also planning initial public offerings in the coming months, including Italy’s Nexi and UAE-based Network International, which last week named former Worldpay chief Ron Kalifa as its new chairman.

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Lyft seeks $23bn valuation in New York IPO

The hurdles in a Deutsche Bank and Commerzbank merger Union resistance is just one of the obstacles facing negotiating teams

Ride-hailing company looks to raise $2.1bn

OLAF STORBECK AND STEPHEN MORRIS

arely half an hour after Germany’s two biggest banks announced formal merger talks on Sunday, the first significant opposition emerged. Stephan Szukalski, leader of the DBV union and a member of Deutsche Bank’s supervisory board, said a deal with Commerzbank would be “a grave mistake”, warning that it would be too complex and could further destabilise both lenders. “We are calling upon all people involved to let common sense prevail”, he said in a statement. But dogged union resistance to a perennially rumoured move that is likely to result in tens of thousands of rank-and-file job cuts is just one of the obstacles facing negotiating teams over the coming weeks. Supervisory boards A merger would need the approval of Deutsche Bank’s 20-member supervisory board, but like most listed German companies, half the seats are held by employee representatives and they are all but certain to reject it unanimously. While chairman Paul Achleitner, who has long argued behind the scenes in favour of a tie-up, could use his casting vote to break a stalemate, that would require the backing of all shareholder representatives — and among Deutsche Bank’s top six investors, only private equity fund Cerberus is firmly in favour of a deal. The others — two branches of Qatar’s ruling al-Thani family, Chinese conglomerate HNA, BlackRock and former JPMorgan finance director Doug Braunstein’s fund — remain sceptical. “People are suspicious whether either company can fix its own house,” one of the key investors told the Financial Times. “Doing this and executing a merger at the same time would almost certainly be too much.” The share exchange ratio makes a deal even harder to digest for the larger partner. At current prices, Deutsche Bank investors would own two-thirds of the combined group, against three-quarters based on long-term averages. And Stuart Graham, founder of Autonomous Research, expects the suitor will have to offer a 20 per cent premium on Commerzbank’s share price, which would make the deal still more unattractive. Bad assets Commerzbank is sitting on €8.4bn in Italian sovereign bonds and €1.3bn in Spanish, marked as “hold to maturity” on its balance sheet. According to International Financial Reporting Standards accounting rules, such assets would need to be revalued at current market prices if Commerzbank were to be taken over by Deutsche Bank, leading to writedowns. While analysts estimate that could amount to €4bn, one person familiar with the details of Commerzbank’s balance sheet said the actual burden would be closer to €2.5bn. “This is an issue, but it would not be a dealstopper,” the person said. Deutsche Bank, meanwhile, has €25bn of illiquid “level 3” assets and about €320bn of derivatives trading exposure. However, managers say its net exposure in derivatives trading is less than a tenth of that figure once netting agreements and collateral are taken into account.

Tuesday 19 March 2019

SHANNON BOND AND TIM BRADSHAW

France warns EU against rushing into US trade talks Paris wants to narrow scope of negotiations on industrial goods and delay until June VICTOR MALLET AND JIM BRUNSDEN

rance has warned that the EU should not rush into trade talks with President Donald Trump, as Paris seeks guarantees that sensitive economic sectors will be protected in negotiations that it hopes can be delayed until after May’s European Parliament elections. Jean-Baptiste Lemoyne, the French junior minister responsible for commerce, told the FT that Paris broadly supports EU plans to hammer out a tariffreduction deal with the US on industrial goods. But he signalled that France was seeking to narrow the scope of the talks and was resisting attempts by other governments to get negotiations under way quickly. “We have concerns linked to the timing for the adoption of the [EU’s negotiating] mandate,” he said. “Because it seems that the EU has already made enough gestures of goodwill so that we might have some proof of good faith from the side of our American friends.” The trade talks were conceived

last year by Jean-Claude Juncker, the president of the European Commission, and Mr Trump as a way to ease tensions stoked by the US president’s threats to hit imports of European cars with additional duties. The commission presented a draft negotiating mandate for the tariff talks in January, urging quick approval by governments so as to avoid US accusations of foot-dragging and to help forestall threatened US tariffs on EU cars. But EU diplomats said that Paris had made clear in talks with other EU member states that it would prefer that the issue was left on ice until after European Parliament elections on May 23-26. France has made clear to Berlin and other EU capitals that the plans as they stand could provide ammunition for populist parties in May’s EU parliament elections, not least given the likely resistance of the gilets jaunes movement to greater market opening. Mr Lemoyne said that the EU’s timetable should not be “linked to American threats”. He noted that the EU had already made “gestures

of goodwill” since Mr Trump and Mr Juncker negotiated their deal in July, including increased EU imports of US soyabeans and liquefied natural gas. Preparations for the talks have also been complicated by US demands that any deal include EU concessions on agriculture, an idea firmly rejected by Paris, the commission and other EU capitals. While Berlin and many other governments share Brussels’ view that the mandate should be adopted quickly, EU diplomats said that France was looking increasingly likely to succeed in its bid to stall the adoption until after the May 23-26 vote. The diplomats said that France and Germany were working on a compromise whereby EU leaders would use a summit meeting in Brussels next week to reaffirm their commitment to the JunckerTrump plan, while holding off for several more weeks in formally signing off the mandate. Senior officials from national capitals will meet on Wednesday to discuss next steps.

Battle for future of France’s Le Monde paper

Journalists try to stop Czech billionaire from taking controlling stake in publication HARRIET AGNEW

nside the glass-panelled Paris headquarters of Le Monde, journalists are battling to prevent a Czech energy billionaire from wresting control of France’s iconic newspaper. The deal designed to block Daniel Kretinsky is in the final stages of negotiations and follows months of discussions between shareholders, publisher and editorial representatives, Le Monde officials told the Financial Times. Since Lazard banker Matthieu Pigasse unexpectedly sold 49 per cent of his stake in the publishing group that owns the daily newspaper to Mr Kretinsky in October, observers have voiced concerns about the Czech billionaire, whose assets include football club AC Sparta Prague, and his growing role in French media. “I’m very suspicious of a foreign billionaire trying to get a foothold in the western establishment through the ownership of media,

especially through a newspaper such as Le Monde, which sets the tone and agenda of news in France and beyond,” said François Godard, a European media and telecoms analyst at Enders Analysis. These concerns have culminated in an attempt to stop Mr Kretinsky increasing his stake. “The concerns are not specific to Daniel Kretinsky, it concerns any shareholder who might try to exercise direct or indirect control over Le Monde,” said Paul Benkimoun, president of the paper’s society of editors, who is involved in the negotiations. The newspaper “is not a moneymaking machine for an investor. But it has a prestige, a renown and a visibility in France and abroad. It’s a powerful business card and we need to know that any investor upholds our values and ethics”. Founded in 1944 at the request of General Charles de Gaulle after the liberation of Paris, Le Monde has established itself as France’s

leading newspaper of record. When its main shareholders Mr Pigasse, telecoms billionaire Xavier Niel and Pierre Bergé, the French businessman who has since died, bought a controlling stake in Le Monde in 2010, it was on the verge of bankruptcy. The trio, chosen as investors after 90 per cent of employees voted for them over a consortium backed by Nicolas Sarkozy, recapitalised the business and a “pole of independence” was established. This is a group representing Le Monde’s journalists, employees and readers, who between them own one quarter of the publishing group. However, Mr Pigasse’s sale of slightly less than half of his stake — making about €50m from the disposal — has strained relations between him and Mr Niel. According to people familiar with Mr Niel’s thinking, he believes it was against the spirit of an investment designed to support a free press rather than to make money.

yft is looking to raise up to $2.1bn in its upcoming initial public offering, it said on Monday, as it seeks a valuation of almost $23bn. The San Francisco-based company suggested a price range of $62 to $68 per share in an updated filing with the US Securities and Exchange Commission. It will use the ticker symbol LYFT when it begins trading on the Nasdaq exchange later this month. The filing gives the first indication of what ride-sharing companies could be worth in the public markets. Lyft’s IPO is expected to be followed by a public listing from its larger rival Uber, which may fetch a market valuation topping $100bn. Lyft’s listing also kicks off what is expected to be a busy period for technology IPOs with other Silicon Valley stars including Pinterest and Airbnb waiting in the wings. In Monday’s filing, Lyft said it would offer 30.8m shares, while underwriters have the option to purchase an additional 4.6m shares. JP Morgan, Credit Suisse and Jefferies are the lead book-runners for the offering. After expenses, Lyft expects to see net proceeds of around $1.9bn, rising to as much as $2.2bn if the underwriters exercise their purchase options. Around 5 per cent of the shares will be offered for sale to some of its longest-serving drivers, who have completed more than 10,000 rides through its app, as well as to Lyft’s directors, certain employees and their friends and family. Lyft, which was founded in 2012 and operates in more than 300 cities in the US and Canada, had revenues in the past year of $2.16bn and a net loss of $911.3m. At a roadshow to market the shares, executives and their bankers are expected to emphasise Lyft’s revenue growth, particularly the rise in revenue per active rider, according to people with knowledge of the plan. That figure has more than doubled to $36.04 at the end of 2018 from $15.88 at the beginning of 2016. Lyft defines an active rider as someone who has taken at least one ride in the past quarter. Costs have also increased substantially, however, tripling to $3.1bn last year from 2016.

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UK stocks draw in ‘brave’ investors as Brexit deadline

Some see London as ‘perfect hunting ground’ as bargain seekers start to circle NIKOU ASGARI

he UK’s domesticfocused stocks are not exactly at the top of most investors’ shopping lists at the mo-

ment. But Fidelity International reckons it is time to “be brave” and buy, underlining that some bargain hunters are starting to circle the market. “In the immediate aftermath of the Brexit vote domestic stocks sold off indiscriminately,” said Aruna Karunathilake, portfolio manager at the investment house’s UK Select fund. “However time is the friend of good businesses which are able to demonstrate their resilience, ability to earn strong returns on capital and generate cash even in tough times. Eventually the market recognises this and several domestically facing fund holdings have already started to outperform the market,” he said in a note. As Kate Allen reports on Monday, the FTSE Local UK index, which tracks companies generating at least 70 per cent of their

revenue in the UK, has lagged behind the FTSE 100 by 20 per cent since the day of the June 2016 referendum, reflecting the weight of companies generating revenue overseas in the bigger FTSE 100 index. That means the UK is the “perfect hunting ground for quality companies at attractive prices”, Mr Karunathilake said. Shares of UK bank Lloyds trade at around seven times earnings, he pointed out, while Belgium’s KBC trades at 10 times earnings. The largely UK-focused Domino’s Pizza Group, meanwhile, trades at 16 times earnings, while the US entity trades at 29 times earnings. “The fund has moderately high exposure to UK domestic business than the overall UK market, which can feel uncomfortable in the face of negative headlines,” Karunathilake said. “However if you want to benefit from this opportunity you have to be brave and follow Warren Buffett’s advice to be ‘greedy when others are fearful and fearful when others are greedy’. I would argue we are now close to the point of maximum fear.”

Gett looks to join taxi-hailing rush to IPO

Company eyes listing in London or Israel amid forecast of profits by end of the year PETER CAMPBELL

axi-hailing company Gett, which anticipates becoming profitable later this year, is planning an initial public offering to cash in on appetite for listings of ride-booking companies. The company, which offers rides through established taxi operators rather than the minicab models adopted by larger rivals such as Uber and Lyft, is considering listing later this year on either the London Stock Exchange or in Israel, founder and chief executive Dave Waiser told the Financial Times. Last summer the company raised $130m from shareholders including Volkswagen, taking the total amount raised so far to more than $700m, and its latest valuation to $1.4bn. More than half of Gett’s revenues come from business accounts, with some 20,000 companies using the business as their taxi-booking service. Mr Waiser said the business considered listing after seeing that ride-booking rival Lyft intended to float despite deepening losses. “We will see how Lyft goes, we believe there’s a lot of public capital waiting for the [technology] darlings [Uber and Lyft], but we also believe that our business model makes sense,” he said. Gett links users with established taxi operators such as

black cabs in London or yellow taxis in New York, allowing it to plug into existing taxi networks with accredited drivers, while also allowing the company to place itself as a more upmarket service. The group, which is a fraction of the size of Lyft, has not published financial figures, but expects to become profitable later this year, and said it currently booked “hundreds of millions” of pounds in revenues. Lyft recorded $2bn in annual revenues last year from ridehailing in 300 markets in the US and Canada, but posted a net loss of $911.3m. Gett’s corporate sales, which account for more than half its revenues and a higher share of profitability, rose 54 per cent last year. A monthly profit chart shows that the global business lost $3.5m during December, but expects to deliver more than $1m in profit by this December. The company’s European business, which is more mature, made a loss of $2.4m but is projected to record a higher profit by the end of the year. “December will be positive, but the breakeven will happen earlier than that,” Mr Waiser said. Gett wants to use funds from the IPO to invest in its existing networks. Uber and Lyft are also both expected to float this year, despite their core operations losing money.

Fearless: the ‘Fearless Girl’ sculpture stands before the London stock exchange in Paternoster Square in the City of London © Bloomberg

Minimum-volatility funds have had their time in the sun The risk is that a strong performance so far this year will start to fade ROBIN WIGGLESWORTH

t a time when many popular investment ‘factors’ have spluttered, the more controversial one has put on a masterclass and sucked in billions of dollars from investors. The future outlook is murkier, however. Factors is what financial academics call theoretically timeless market drivers, such as a tendency for cheap stocks or those with positive momentum to deliver above-market returns over time. One of the more controversial factors is called “minimum volatility” or “low volatility”, based on research that shows that steady, boring stocks that fluctuate less than the overall market tend to do well over time. The theory is that these are generally less glamorous stocks that are unfairly cast aside by glory-hunting stockpickers who prefer higher-octane bets, and therefore reward investors in the long run. It is disputed by some fund managers and academics — who argue that “true” factors are compensation for taking on some kind of additional risk, not a free

lunch for buying less risky stocks — but minimum-volatility funds have been big winners lately. BlackRock’s iShares Edge MSCI minimum-volatility, exchangetraded fund USMV is the biggest of the breed, with nearly $24bn of assets, and its performance has lately trounced that of the wider stock market and the other “big five” investment factors (value, momentum, quality and size rounding up the rest). The ETF proved far more resilient in last year’s turmoil, and has climbed more than 10 per cent this year. That means it touched a new record high last week, even as the S&P 500 remains almost 4 per cent lower than its September peak. USMV is merely the biggest of an expanding bunch of “minvol” ETFs, which now manage about $56bn, up from $40bn at the start of last year, and $10bn five years ago. The performance is a vivid illustration of the recent change in equity market leadership. Technology stocks have taken a beating since last summer, while real estate and utilities — both of which are staples of min-vol ETFs — have

performed well. However, these sectors are often considered “bond proxies” because of their steady prospects and dividend payments, and have primarily rallied thanks to the US Federal Reserve’s volte-face on further interest rate increases. The Fed looks unlikely to tighten monetary policy any time soon, but if the economy proves resilient and markets remain buoyant the US central bank could revisit its dovish stance later this year. Moreover, both utilities and real estate sectors are now also trading at price-to-earnings ratios well above the broader US stock market, indicating min-vol ETFs will struggle to maintain their sterling performance. More broadly, just like individual stocks or more traditional asset classes, investment factors can also suffer from “crowding”. Min-vol strategies suffered a deep and prolonged bout of underperformance in the second half of 2016, after a similar period of buoyant returns, investor interest and massive inflows. Don’t be surprised if something similar happens again.

Asian tech groups struggle to adjust to iPhone slowdown Chip providers and display companies tighten belts as profit forecasts shrink KENJI KAWASE, NIKKEI ASIAN, CHENG TING-FANG, LAULY LI AND KIM JAEWON

pple shocked global stock markets with its January 2 warning that a steep drop in iPhone sales in China would force it to miss quarterly sales targets for the first time in more than 15 years. Investors were stunned by the ferocity of the new year sell-off that followed. But for the Asian technology companies that supply components to Apple and other smartphone makers, it had been apparent for months that something was wrong. From chip manufacturers to panel makers, the final quarter of 2018 was marked by a sudden, swift drop in demand — particularly in China. Chipmakers, whose strong performance led to record profitability in 2017, were alarmed by the rapid shift at the end of the year, and many warned that it could linger. Among them was Nanya Technology, a global DRAM chip provider that competes with Samsung

Electronics, SK Hynix and Micron. “We saw a sudden freeze from the demand side since the third quarter of last year and we continue to face price correction in the current quarter,” said Nanya’s president Lee Pei-Ing. “Smartphone sales are not as expected, the server market is digesting inventories, and consumer electronics devices demand is falling too.” With the outlook uncertain, Nanya is tightening its belt. The company slashed this year’s capital expenditure by half to NT$10bn ($323m) due to slowing demand and trade tension between Washington and Beijing. Asian tech companies are facing two overlapping and intertwined problems: falling smartphone sales and the slowdown in China. According to IDC, a tech industry consultancy, global shipments of smartphones in 2018 were 1.44bn units, down 4.1 per cent from the previous year, marking a second straight year of decline.

What hurt the most was a drop of more than 10 per cent in China, the world’s largest smartphone market. Last year around this time, analysts were predicting that tech would power Asia300 corporates towards another strong year in 2018. The aggregate net profit of Asia300 companies — a gauge of 330 leading non-Japan Asian corporations selected by Nikkei — was expected to increase by 14.9 per cent, following robust growth of 21 per cent in 2017. Now, however, analysts estimate that total net profit growth for 2019 will be 4.4 per cent, according to the latest consensus data compiled by QUICK-FactSet. This reflects a sharp loss in growth momentum, especially during the final quarter of last year. Of the 128 companies that had announced earnings by March 7, net profit growth was down to 5.3 per cent. When analyst forecasts for the remaining companies — a total of 289 with comparable data going back 10 years — are blended in, the figure comes down to 5.1 per cent.

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ANALYSIS

Theresa May pins Brexit deal hopes on last-minute DUP talks Hardline Eurosceptic Tory Jacob Rees-Mogg hints he might support PM’s agreement LAURA HUGHES AND SEBASTIAN PAYNE

T McGreggor Crowley of IvyWise: ‘Everyone wants to get their kid into Stanford but the admission rate is, like, 4 per cent’ © AP

US consultants market the key to gates of the Ivy League College admissions scandal shows how battle for university places is big business JOSHUA CHAFFIN

he young woman was nearly hyperventilating 30 minutes later. “So, it’s been like half an hour, and I’m like, semi-calmed down — to the point where I’m not shouting expletives any more . . .” she explained, addressing her camera phone. “But, yeah. I got into Yale. Oh, my God! I got into Yale!” In the community of college admissions consultants, who help students snare closely fought-over places in US universities, this was the money shot. The selfie video appears on the website of one of the premiere practitioners of the art: Manhattanbased IvyWise. Interlaced with the promise of Yale the company also offers what may be unnerving advice for anxious parents: they should start early — ideally signing their children up by the time they are in the eighth grade — and be prepared to spend upwards of $100,000. “The reality is there is an ‘arms race’ in the admissions process but it was not created by our profession,” Katherine Cohen, who founded IvyWise 21 years ago and boasts degrees from Brown and Yale — as well as a certificate in college admission counselling from UCLA — wrote in an email from Asia. The real culprit, Ms Cohen argued, was that US university places had remained stagnant even as applications surged in recent years, including from abroad. Many secondary schools have a single counsellor who is meant to guide hundreds of students through the minefield. The role of admissions consultants and their place in the university ecosystem is attracting fresh attention with the revelation last week that dozens of parents had paid approximately $25m in bribes through a crooked California consultant, William “Rick” Singer, to secure places for their children at top schools. On Friday, Yale’s president, Peter Salovey, promised a “searching investigation” that would include a focus on the role of private consultants “whose work is conducted out of the view of admissions officers”. “The admissions process has become extremely competitive, leaving this economy ripe for a market for those who need more help navigating this process,” Ms Cohen said. Hours later, her communications adviser insisted Ms Cohen had not meant to suggest there was an arms race — and that there was not one. The industry varies widely, from individuals who hang out a sign and

call themselves admissions consultants, all the way to established firms. Their services range from test preparation and helping students select appropriate schools to coaching them on application essays and, in some cases, building an application over the course of years. “How do we help this kid become a better version of himself?” is how one consultant earnestly described his mission. There are also self-styled gurus, supposed Ivy-whisperers, pseudoscientists and bold promises in the mix. Mr Singer’s former business partner has pioneered what he calls the “academic mentorship” model. A rival offers his unique four-stage “method”. (“The approach is deceptively simple, but its effects are transformational,” says his website, which features a picture of Harvard.) Amid the crowd, Mr Singer, a former basketball coach, was an outlier. For a fee, he would doctor students’ entrance exam results or sneak them through a “side door” by conniving with corrupt coaches and administrators to make them appear as top athletics recruits — even if they did not play a particular sport. Mr Singer has pleaded guilty and has been cooperating with authorities. Long before last week’s revelations, some viewed him warily. “He was kind of seen by people in the industry as a blowhard, kind of shady,” said one test preparation consultant on the west coast who has known Mr Singer for years. One red flag: he never seemed to attend the mainstream industry conferences, this person said. He was also boastful. “He would brag about how he worked with Steve Jobs’ kids. He would brag about how many companies used him,” this person added. Even if Mr Singer’s criminal conduct was egregious and far outside the industry’s norms, the mere existence of admissions consultants raises questions over a US higher education system that presents itself as striving for fairness but looks to many critics like a game rigged for the wealthy. “There always has been the legal advantage one has if you have financial resources,” Stefanie Niles, the president of the National Association for College Admission Counselling, acknowledged. Ms Niles, who is also vice-president of enrolment at Ohio Wesleyan University, noted that most consultants adhered to ethical guidelines and were motivated by a desire to help students navigate what has become a confusing and cut-throat landscape. “As this process has become more

competitive,” she said, citing the “exponential” growth in applications, “it has led families to seek guidance on how to secure admission.” When asked whether their highpriced services represent an unfair advantage, many consultants point to their pro bono work, as well as the free offerings on their websites. “We work really hard to put out a lot of free resources and information to level the playing field and provide access to everyone,” Ms Cohen wrote. Still, for those willing to pay, IvyWise’s pitch is tantalising: access to a team of counsellors who — like Ms Cohen — have worked in the admissions departments at elite universities, including Yale, MIT, Columbia and Northwestern, giving them first-hand insight into what those schools are seeking. Last year, 91 per cent of its students gained admission to at least one of their top three universities, according to IvyWise. “Whether it’s immediate access to a speciality tutor for an upcoming exam or flying counsellors halfway around the world for a meeting with a student, we’re willing to do what we can to make sure families are supported in every aspect of the college counselling process,” its website advertises. Although some rivals accuse the firm of pressure tactics, McGreggor Crowley, who oversaw student selection at MIT before joining IvyWise, describes its approach in more nurturing terms. He prefers to begin working with students years before they are even applying to university. The goal is to help them begin to understand what interests them, and then cultivate those interests. “My goal is to help them see that a lot of these opportunities exist but that they have to be generated,” he explained. Much of his work, he said, also involves managing expectations — often more for the parents than their children. “The schools that parents think their kids deserve — it’s really impossible to get in,” Mr Crowley observed. “Everyone wants to get their kid into Stanford but the admission rate is, like, 4 per cent.” Parents had never asked him to do anything untoward, he said, but had sometimes inquired how to make a donation to a particular university. Many of his clients would kill for Mr Crowley’s credentials: he attended MIT and Harvard Medical School, having made it there from south Texas and without any help from fancy admissions consultants. Given his background, his work sometimes felt a bit surreal, he confided, but never inappropriate.

heresa May is pinning her hopes of pushing her Brexit deal through the House of Commons on winning over the Democratic Unionist party in last-minute talks. The UK prime minister is expected to table a third Commons vote on her deal on Tuesday or Wednesday, after it was heavily defeated twice in large-scale rebellions by Eurosceptic Conservative MPs and the DUP’s 10 MPs. But Mrs May suffered a setback on Monday when Boris Johnson, the Brexiter former foreign secretary, refused to back her agreement unless she secured changes to the Irish backstop, designed to prevent a hard border on the island of Ireland. Writing in the Daily Telegraph,

government would not hold a fresh vote unless they had a “high degree of confidence in winning it”. The DUP has demanded legally binding changes to the Withdrawal Agreement. Officials said they expected the DUP would be offered a revised “Stormont lock” on the Irish backstop which would offer guarantees that any EU regulations applied to Northern Ireland would be extended to the rest of the UK. The guarantee would not be made to the Withdrawal Agreement, which the EU has so far refused to reopen, and would instead be written into UK law. “All eyes are on the DUP talks,” one government official said. The unionist party is also understood to be reiterating demands to change the rules on air passenger taxes, which it ar-

Mr Johnson described the deal as “detrimental to the interests of this country”. He called on the prime minister to delay the third vote and seek changes to her agreement at a European Council meeting on Thursday. “Unless we discover some willingness to resist, the diet of capitulation seems set to continue for at least two years,” he wrote. “We will be legally and politically at the mercy of Brussels”. However, Jacob Rees-Mogg, head of the European Research Group of Eurosceptic MPs, signalled on Monday that he may be willing to support Mrs May’s Brexit deal — if a no-deal Brexit is no longer a viable option. “No deal is better than a bad deal but a bad deal is better than remaining in the European Union in the hierarchy of deals,” he told LBC radio. “A two-year extension is basically staying in the European Union.” Dozens of Eurosceptic MPs are flirting with supporting the government in the next vote on Brexit, but are awaiting to see if the DUP change their mind. Were Mr Rees-Mogg to rally behind the deal, it is likely that dozens of other ERG MPs would follow suit. Mrs May’s allies believe that if the DUP announced its intention to back the deal, it would persuade rebel Tory Eurosceptics to fall into line and allow her to go ahead with the vote this week. Downing Street confirmed that officials would continue to talk to the DUP on Monday and the

gues has had an adverse impact on the region’s tourism industry because the levy does not apply in Ireland. Government officials also suggested the DUP would want assurances on the continuation of the state pension triple lock and winter fuel payments. “We will only bring the deal back if we are confident that enough of our colleagues and the DUP are prepared to support it so that we can get it through Parliament,” the chancellor Philip Hammond told the BBC’s The Andrew Marr Show on Sunday. Mr Hammond denied that an offer of extra cash had formed part of discussions he held with the DUP on Friday, but added: “Well, look, we are coming up to a spending review and we will have to look at all budgets, including devolved block-grant budgets.” A vote on Tuesday would require the government to table an emergency business motion on Monday. Asked if the government had secured enough support, Mr Hammond told the BBC: “Not yet; it is a work in progress.” Writing in the Sunday Telegraph, Mrs May said failure to support the deal would mean “we will not leave the EU for many months, if ever”. Jeremy Corbyn, Labour ’s leader, confirmed on Sunday that his party would instruct its MPs to vote in favour of a parliamentary amendment put forward by backbenchers Peter Kyle and Phil Wilson that would support a second referendum on Mrs May’s deal.

Tuesday 19 March 2019

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Live @ the Stock exchange

BUSINESS DAY

Prices for Securities Traded as of Monday 18 March 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 169,228.63 5.85 0.86 606 56,019,235 UNITED BANK FOR AFRICA PLC 258,205.63 7.55 1.34 456 22,615,526 687,583.21 21.90 -0.45 304 27,576,849 ZENITH BANK PLC 1,366 106,211,610 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 296,136.17 8.25 0.61 386 6,487,360 386 6,487,360 1,752 112,698,970 BUILDING MATERIALS DANGOTE CEMENT PLC 3,235,992.36 189.90 -0.05 48 324,163 112,320.90 12.95 0.78 28 214,995 LAFARGE AFRICA PLC. 76 539,158 76 539,158 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 351,242.56 596.90 - 10 2,675 10 2,675 10 2,675 1,838 113,240,803 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,900.00 95.00 - 0 0 11,300.89 45.20 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 0 0 0 0 0 0 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 0 0 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 76,312.80 80.00 - 7 8,680 OKOMU OIL PALM PLC. PRESCO PLC 75,000.00 75.00 - 6 10,030 13 18,710 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,800.00 0.60 - 3 19,182 3 19,182 16 37,892 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 820.66 0.31 - 5 31,100 JOHN HOLT PLC. 202.36 0.52 - 2 6,593 1,903.99 2.93 - 2 764 S C O A NIG. PLC. TRANSNATIONAL CORPORATION OF NIGERIA PLC 49,590.55 1.22 -2.40 72 8,130,413 22,330.05 7.75 - 21 61,132 U A C N PLC. 102 8,230,002 102 8,230,002 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 36,300.00 27.50 - 12 24,308 165.00 6.60 - 0 0 ROADS NIG PLC. 12 24,308 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,833.02 1.86 -4.62 18 406,210 18 406,210 30 430,518 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 12,135.72 1.55 - 18 399,669 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 4 12,400 GUINNESS NIG PLC 140,184.50 64.00 - 38 40,247 INTERNATIONAL BREWERIES PLC. 206,730.48 24.05 - 5 6,001 NIGERIAN BREW. PLC. 599,767.65 75.00 - 66 213,079 131 671,396 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 54,750.00 10.95 7.35 155 6,602,115 DANGOTE SUGAR REFINERY PLC 166,800.00 13.90 -0.36 37 321,689 FLOUR MILLS NIG. PLC. 77,907.21 19.00 - 29 90,148 HONEYWELL FLOUR MILL PLC 9,516.24 1.20 -1.64 34 475,846 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 1 110 NASCON ALLIED INDUSTRIES PLC 54,843.37 20.70 - 18 78,203 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 274 7,568,111 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 22,538.42 12.00 - 9 13,877 NESTLE NIGERIA PLC. 1,224,653.91 1,545.00 - 18 5,539 27 19,416 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,978.36 3.98 - 11 134,267 11 134,267 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 43,675.25 11.00 - 19 27,678 UNILEVER NIGERIA PLC. 222,331.71 38.70 - 35 94,319 54 121,997 497 8,515,187 BANKING DIAMOND BANK PLC 56,974.56 2.46 0.41 52 3,786,578 ECOBANK TRANSNATIONAL INCORPORATED 247,718.94 13.50 - 25 279,893 FIDELITY BANK PLC 61,136.82 2.11 -1.40 106 6,232,873 GUARANTY TRUST BANK PLC. 1,041,863.74 35.40 -0.14 192 12,648,998 JAIZ BANK PLC 15,616.05 0.53 -1.85 14 1,006,312 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 66,217.96 2.30 -0.43 35 8,118,567 UNION BANK NIG.PLC. 199,477.16 6.85 -2.14 33 282,092 UNITY BANK PLC 9,468.36 0.81 - 16 432,691 WEMA BANK PLC. 27,387.87 0.71 -7.79 47 4,805,869 520 37,593,873 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,920.45 0.71 8.45 16 641,110 23,100.00 2.20 - 3 10,606 AXAMANSARD INSURANCE PLC CONSOLIDATED HALLMARK INSURANCE PLC 2,357.70 0.29 - 4 37,115 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 3,093.20 0.21 - 8 1,923,012 GOLDLINK INSURANCE PLC 2,001.98 0.44 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,197.03 0.30 -3.23 9 652,353 LAW UNION AND ROCK INS. PLC. 2,191.13 0.51 - 4 26,181 LINKAGE ASSURANCE PLC 4,400.00 0.55 -6.78 17 1,210,000 MUTUAL BENEFITS ASSURANCE PLC. 1,920.00 0.24 -4.17 19 2,600,020 NEM INSURANCE PLC 12,409.18 2.35 -6.00 9 618,595 NIGER INSURANCE PLC 1,702.69 0.22 - 1 24,454 PRESTIGE ASSURANCE PLC 2,691.28 0.50 - 2 43,965 REGENCY ASSURANCE PLC 1,667.19 0.25 - 1 120 SOVEREIGN TRUST INSURANCE PLC 1,918.39 0.23 -8.00 15 5,661,100 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,912.00 0.21 - 0 0 WAPIC INSURANCE PLC 5,353.10 0.40 - 21 190,235 129 13,638,866 MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,452.82 1.51 0.67 8 270,000

8 270,000 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 3,780.00 0.90 - 0 0 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 0 0 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 1 1,000 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 1 1,000 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,560.00 3.78 -0.53 70 1,475,568 CUSTODIAN INVESTMENT PLC 35,291.19 6.00 -0.83 10 182,346 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 35,644.88 1.80 -2.70 148 13,668,126 1,800.88 0.35 - 3 17,004 ROYAL EXCHANGE PLC. 492,570.60 48.10 - 31 168,547 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 17,100.00 2.85 1.79 65 2,225,484 327 17,737,075 985 69,240,814 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 1,065.94 0.30 7.14 8 1,462,000 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 8 1,462,000 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 7,425.00 4.95 - 2 10,200 FIDSON HEALTHCARE PLC GLAXO SMITHKLINE CONSUMER NIG. PLC. 13,812.37 11.55 - 18 78,589 MAY & BAKER NIGERIA PLC. 4,019.80 2.33 - 2 14,030 1,272.44 0.67 - 8 60,216 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 325.23 1.50 - 1 30,010 PHARMA-DEKO PLC. 31 193,045 39 1,655,045 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 0 0 0 0 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 2 100 NCR (NIGERIA) PLC. 648.00 6.00 - 0 0 TRIPPLE GEE AND COMPANY PLC. 381.11 0.77 - 0 0 2 100 PROCESSING SYSTEMS CHAMS PLC 939.21 0.20 - 0 0 E-TRANZACT INTERNATIONAL PLC 11,088.00 2.64 - 0 0 0 0 2 100 BUILDING MATERIALS BERGER PAINTS PLC 2,391.04 8.25 - 4 2,065 CAP PLC 26,180.00 37.40 - 14 16,931 CEMENT CO. OF NORTH.NIG. PLC 249,726.52 19.00 - 11 308,490 590.90 0.28 - 1 1,000 FIRST ALUMINIUM NIGERIA PLC MEYER PLC. 286.87 0.54 - 0 0 1,999.41 2.52 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,279.20 10.40 - 0 0 30 328,486 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 3,610.71 2.05 -8.89 19 207,641 19 207,641 PACKAGING/CONTAINERS BETA GLASS PLC. 39,497.79 79.00 - 2 2,955 GREIF NIGERIA PLC 388.02 9.10 - 0 0 2 2,955 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 51 539,082 CHEMICALS B.O.C. GASES PLC. 1,577.57 3.79 - 2 13,050 2 13,050 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 50.60 0.23 - 0 0 0 0 2 13,050 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 12 247,300 12 247,300 INTEGRATED OIL AND GAS SERVICES OANDO PLC 72,723.76 5.85 -0.85 97 1,874,752 97 1,874,752 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 59,858.81 166.00 - 13 2,339 CONOIL PLC 15,960.90 23.00 - 10 16,067 ETERNA PLC. 5,738.24 4.40 - 7 18,200 FORTE OIL PLC. 36,469.47 28.00 - 25 231,371 6,354.80 20.85 - 0 0 MRS OIL NIGERIA PLC. TOTAL NIGERIA PLC. 67,904.37 200.00 - 12 10,723 67 278,700 176 2,400,752 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 16,576.10 1.70 - 1 170 1 170 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 411.72 0.35 - 1 200 1 200 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,947.48 5.00 - 1 40,000 TRANS-NATIONWIDE EXPRESS PLC. 304.75 0.65 - 3 6,250 4 46,250 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 1 1,000 1 1,000 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 0 0 IKEJA HOTEL PLC 3,887.35 1.87 -9.66 9 501,954 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 41,042.18 5.40 - 3 39,493 12 541,447 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 217.73 0.36 - 1 20,455 LEARN AFRICA PLC 1,010.60 1.31 - 5 11,000 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 862.82 2.00 - 1 2,000 7 33,455

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INSIGHT/INNOVATION

Minimum wage and Nigeria’s jobs crisis

OGHO OKITI

wo weeks ago, I wrote a detailed analysis of the reforms required that will help for improvements towards changing Nigeria’s minimum wage (See BusinessDay 4th of March p.30). This article is a slight modification of the arguments made in the analysis, especially in relation to Nigeria’s job crisis. In the analysis, I argued that the manner in which we currently change the minimum wage has at least four weaknesses. First is that the change in minimum wage is often preceded by sustained agitation by the labour, showing that there is no complete established principle for which the minimum wage can be altered. Another weakness is that the process is accompanied by huge financial and opportunity costs. For instance, the 2019 planned change involves agitations by labour, planned strikes, the cost of setting up the tripartite committee etc. Also, Nigeria’s minimum wage consistently lags behind inflation, reflecting negative real wage growth, especially in the public service. Though real wage growth is slow in the private sector as well, especially for workers with minimum skills, there is a significant disparity between wages in the public sector and large sections of the private sector. Finally, the process and the shocks that follow the introduction of a new

minimum wage expose vulnerabilities in the States. In the analysis also, I showed that changes to Nigeria’s minimum wage has some interesting properties. They are usually steep, with significant increases at every point. They are also few and far in between. Between 1981, when the first minimum was introduced and now, there have only been four other changes, with an average of about 8 years for each change. It also means that the changes are significant. For instance, if the N27, 000 presented by the President is passed into law, the minimum wage will rise by 50%. These features are what makes Nigeria’s minimum wage data movement resemble that of a staircase. Other data with similar features include that of the exchange rate, electricity and fuel prices. Mathematicians describe such movement step or staircase functions. The common feature of all these variables is that the government controls them, and the government determines when they change. By now, it is apparent that the significant adjustment to the minimum wage is followed by shocks to expenditure and debts in the States. However, frequent and smaller adjustments (described as crawling pegs by economists), especially given rising and significant levels of inflation, will minimise these shocks, economic distortions and improve budgetary planning in the States and in the central government. While the minimum wage will always be a finite number, the damage to economic policy and budgetary planning in the States follows from the poor policy and legal environment on how the minimum wage changes. While most countries now have laws for low pay and minimum wages, they also have mechanisms in place for adjusting the minimum wage in a way that avoids shocks to the economy.

Now, does the minimum wage have implications for the broader and wider jobs market? I reckon, despite the efforts and costs of adjusting the minimum wage, the problems in the country’ labour market are bigger and intractable. The revised minimum wage is expected to have marginal implications for the over 23.1% of the labour force currently unemployed, according to data from the National Bureau of Statistics (NBS). Indeed, a greater and bigger problem of the country’s labour market is summarized, not by rising unemployment, from 6.4% in Q4 2014 to 23.8% in Q3 2018, but by the dramatic increases in the numbers entering the jobs market. Consequently, unemployment is rising, both as a result of dramatic increases in the numbers of those entering the jobs market and weak economic growth. Given that an unpleasant divergence has emerged in the growth and unemployment data in the last three years, it is clear that we cannot make progress on jobs without dealing with weak economic growth. The weak growth is underlined by negative real wage growth and stagnant productivity, while the labour market is suffering from poor and weak skills required for the improvements in productivity and income growth. There is no doubt that a narrow bill merely revising the minimum wage will not resolve all the weaknesses associated with the minimum wage process. To make even a dent on the labour market, will require broader and more coherent reforms. To improve the minimum wage process, and promote the growing flexibility of the labour market, the law should rather legislate hourly minimum wage, rather than a monthly minimum wage. Today’s work environment is not as rigid as it used to be; more and more people are engaged in freelance employment, contract jobs, commission based

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While most countries now have laws for low pay and minimum wages, they also have mechanisms in place for adjusting the minimum wage in a way that avoids shocks to the economy

employment, and part-time employments. The Act, as it excludes these groups, creates room for labour exploitation. There are also many jobs in governments that can leverage on hourly wages legislation. But to deal with the intractable labour market is another matter entirely. Yes, there are many things that need to be done, but I will mention two critical ones because of the impact they will have on investments and the chain reaction on employment. Those two things are power and the costs of capital. While progress has been made on power since the reform process was completed, we must recognize that the break on the fair price for power is limiting the investments required in the sector, which will in turn, reduce the costs of power in the long run. There is plenty evidence that with the right price, investors will drive the sector’s performance and the result will be visible in a matter of few years. On costly capital, there are two critical dimensions. One is that the avenue for long-term capital is small. It is also the case that the actual costof capital is high. While this is not unusual for a developing country, government policies make the situation worse. The solution is not to compel the Central Bank of Nigeria (CBN) to lower interest rates, but the government can start by looking inwards in detail how its policies are driving interest rates up, limiting foreign investments, crowding out private investments in Nigeria, and wasting the limited capital we have in the country. If we can successfully address power and then capital issues, we can begin to drive up employment and productivity in the country. I thank you.

Dr. Okiti is the president, Time Economics Ltd @ Dr_Okiti 081.7153.0058

The heroes of the 2019 elections PROPHYLAXIS

AYULI JEMIDE

he elections are over or almost over but we all just cannot stop talking about elections. Maybe INEC has infected us with the ‘’inconclusive’’ bug? Despite the obvious sad tales emanating from the 2019 elections, there is a lot that we can be proud of as Nigerians and there are many Nigerians’ we should be proud of. We must salute the courage of certain people whose stories still give us hope that it is not all shame and gloom. INEC has some brave staff that must be celebrated. These people refused to be compromised and shouted from the roof top even when their lives were threatened, or they were forced to announce wrong results at gunpoint. We must mention Mike Igini, the Resident Electoral Commissioner in Akwa Ibom State, who despite threats and all enticing offers stood his ground and maintained his integrity. This great alumnus of University of Benin and erudite lawyer is quoted as saying: “I have not come here to count money. I only come here to count ballot papers. Those who want me to compromise the process are

the ones shouting out there’’. These are the type of people who should be given national awards. We must celebrate Ayoade Akinnibosun, one of the suspects in the April 5, 2018 bank robberies in Offa, Kwara State. He told a Kwara State High Court a few days ago how the police coerced him to implicate Senate President Bukola Saraki and he refused. Even though the Senate President has lost his re-election bid, Ayoade still stands his ground instead of throwing the Senate President under the bus to buy his freedom. This armed robbery accused on trial surely has lessons to teach Nigerians about gallantry and honour. We must doff our hats for the late Dr Ferry Gberegbe who was a collation officer in Rivers state. He was shot in the stomach when a police officer from the SARS unit of the Nigerian police sprayed bullets indiscriminately at innocent citizens who tried to resist the subversion of elections by the police officers. Dr Gberegbe died a few days ago in a Port Harcourt hospital. People like him are heroes of our democracy. The members of the National Youth Service Corp who were used as ad-hoc staff by INEC must be commended. They braved all the inconveniences and the election postponement to serve the country. Some fell into compromise, but majority of them were outstanding in how they discharged their duties. We must give kudos to the Nigerian social media kings and queens (names too numerous to mention) who in this period have harped on the ills of the electioneering. They have taken on the case of the late Dr Ferry Gberegbe and many others who were killed in cold blood by security operatives.

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We must recognize many candidates who fought a good fight. Many lost elections but started a movement and made a point that elections are about the people and not about a godfather or favourite political party

Justice must be done! We must salute the Commissioner of Police of Kano State who has been acclaimed by citizens to be an officer and a gentleman. CP Wakili Mohammed has endeared himself to Nigerians for simply doing his job and providing a level playing field for elections to hold. Many of his colleagues in other states failed woefully in this regard, but CP Wakili even arrested the Deputy Governor of Kano State in a bid to avert violence. We must acknowledge the indigenes of Kano State for being exemplary citizens. They have taught Nigerians the art of peaceful coercion by citizens. Watching the videos of the street marching and chanting by the voters in Kano was a great sight to behold. As we speak the indigenes of Kano have now organized themselves into independent election monitors to man and protect their votes using human herds during the upcoming reruns. We must recognize many candidates who fought a good fight. Many lost elections but started a movement and made a point that elections are about the people and not about a godfather or favourite political party. One person in this category that is worthy of mention is a well-known entertainer and actor Bankole Wellington (Banky W) who ran for House of Representatives in Lagos State. This first timer in politics joined a new political party – Modern Democratic Party – and ran a great campaign which paid off with a great support from voters from all cadres. Banky W’s campaign posters were defaced in some parts of Lagos but he was not discouraged. At the end of the election Banky W tweeted: ‘’Soooo grateful for everyone who has believed in our movement to give us a chance.We have worked. We are

top 3, and we earned every single vote we got. We will sustain the momentum and continue building this movement. We are not finished, we’re just getting started’’.He lost the election, but he started a movement. Can you imagine how the 2019 elections would have been if the Peoples’ Democratic Party (PDP) stayed comatose as predicted by many pundits? We must applaud the PDP led by its energetic Chairman Uche Secondus. PDP did not only wake up from slumber, they ran a good issues-based campaign, their primaries and rallies were adjudged to be the best amongst all the parties. They surely gave Nigerians a veritable option and came to the table with renewed potency. The greatest applause goes to the Nigerian voters. The 2019 election is perhaps one of the worse elections in terms of logistical hardships for voters. INEC designed the elections to make everything difficult for the voters.Voter registration was a nightmare, collecting your Permanent Voters Card was a bad dream and the voting process was tedious. Then the postponement came at the oddest time and voters were brow beaten. As if this was not enough, INEC’s world record in the number of reruns and inconclusive elections has given INEC a final badge of distinction as the most voter unfriendly election umpire anywhere in the world. Despite the frustrations, the Nigerian voters braved all the hurdles and came out to vote. All Nigerian voters deserve a resounding applause!! God bless Nigeria!

Ayuli Jemide is Founder and Lead Partner of Detail Commercial Solicitors. An entrepreneur, public speaker and writer. Email: AJ@ayulijemide.org Twitter: @JemideAyuli

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